Old newbie in California

[Shari Theodozio]

Hello Bigger Pockets Community!

My name is Shari Theodozio and I have been a Real Estate Appraiser in Atwater, California for the past 14 years. I really could kick myself for not getting started in purchasing rental properties earlier when the market collapsed, but life has a way of getting in the way.

I got started in investing in rental properties last year after reading Robert Kiyosaki's book (didn't we all) and listening to bigger pockets and other you tube videos. I got rather excited and jumped the gun too quickly and purchased two properties from a "turn key" company in Indianapolis and got burned on both houses. Unfortunately, only one is renting after an additional $18K was shelled out in repairs. The second home is just a shell of a property and I am needing to currently sell.

I purchased a third home in Indianapolis from a realtor after doing some research on my own. I purchased the property under market value and it needed an additional $7K in repairs. Again, the property management company that I was contracted with was supposed to do the repairs before it rented. Turns out no repairs were made and a tenant was placed in the home prematurely (no health and safety items thank heaven). For the past year, I have broken even each month doing repairs as we go. Hopefully, this year will be better.

I have one more rental property that is actually doing well...Whew.

I took some time off last year to re-group, re-learn, lick my wounds a bit and figure out what I'm doing wrong. I guess the best lessons come from our biggest mistakes and I have to get rid of the feeling of being embarrassed by telling my story. I welcome any suggestions and chastising!

I'd like to start purchasing properties again, but I'm a little hesitant about going the "turn key" route. I've read both good and bad reviews on it and being in California, I'm considering it as an option. What are everyone else's thoughts on out of state turn key?

Also looking for any other investors I can talk with and learn from in California?  

Thanks for listening and hope to hear from you!

[Arlen Chou]

@Shari Theodozio sorry to hear that you got taken my the "turn key" guys. I am not sure what pulled you to Indianapolis, but there is money to be made in California.  You are living proof of the dangers of "turn key" investing, so I am not going to go into that issue. Regarding CA, you are in a region that does not have the crazy appreciation potential that coastal cities have. With that being said, I am sure that there is opportunity in the CV. More importantly you will be closer to your investments so you will be able to keep an eye on any renovations or repairs that your buildings may need. If you are strategic about it,  you could probably self manage the properties until you have enough cash flow to offset a PM. Look for areas of employment or housing needs.  I am not sure how the student housing market is in Merced with the UC Merced in place, but that might be an option.  Additionally Amazon has multiple distribution centers North West of your location.  I am not sure where the employees live, but I would guess Modesto, Manteca and Tracy are good bets. It's real easy to get sucked into the idea of buying cheap homes far away and think that profits will be high.  However, you really should consider your exit strategy as much, if not more than your entry strategy.

Good luck to you!