I have about 250-350k in my California homes equity that I’m going to tap into. My goal is to get as many rental properties and as much cash flow as possible. I was recently listening to the Old Dawgs podcast (End of Dec 2019) about an IT engineer like myself that took $50k in home equity and the husband/wife team turned it into $54M worth of rental properties in Texas after 4 years (I know this rare, but illustrates the art of the possible). I got the message about Cash flow is King! So trying to follow that path of getting rentals and cash flow and tapping equity and getting more and more rentals is my goal. Good thing my regular job pays pretty handsomely so I’ve got additional income sources to help float a few creative ideas. Here are the options I’m looking at in the order they have become apparent to me:

1.) Get a MF duplex or fourplex nearby me in Northern California (Sacramento) for anywhere between $500-700k, each unit can bring in $1250-1400. Units are built around 1965-1975. I’m super handy and willing to play landlord so I can save that extra money and would want to put in sweat equity with floors etc to add $50k+ of value over a few years. Con is that this is California and prices are already kinda high.

2.) Get a MF fourplex in farther Northern California (Redding) for about $400-600k, each unit brings in about $800. Units built around 1970-1980 can be upgraded. I have local family and friends there to help play landlord.

3.) Get a MF fourplex or more units in Texas. I see lots of great deals around San Antonio and other parts where I can get a fourplex for around $400-600k and are like brand new, meaning no upgrades needed. Rents are decent on these newer an larger units, maybe like $1250/unit. Because I’d be making a bit more on rental income vs mortgage ratio I could afford to use a local property manager.

4.) Same situation as above in Cleveland and other areas.

My main questions:

-For a first time investor, do you use all the equity and money you have to get the biggest unit you can afford? Or start with one unit and go from there? Go big or go home is my normal thinking, but playing it safe to start is cautious, but also there is lost opportunity by holding back equity I have.

-Is investing in California just stupid because price are so inflated and the tax situation?

-Is the money I save by being local and being the landloard not a reasonable offset to a higher earning property in Texas etc?

-Is going for MF something most people would do if they could afford it over a SF unit when the goal is most cash flow and many rentals?

-If you have a regular job that pays a salary in the 6 figures is it a no brainer to not waste time on property management and property upgrades? I like and am really good and home improvement but not sure if the whole TimeMoney equation works out.

First Time Real Estate Investor - Looking for cash flow in the US

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