All Forum Posts by: Mike Bargetto

@Account Closed 

Hi Chuck, I would love to see interior/exterior photos for Wedge. Thank you. 

Hi @Rhyna Orillaneda thanks for reaching out to me. I am happy to answer these questions. We own in Indianapolis Indiana, St. Louis Missouri and Charleston South Carolina, all while living in California. If you are looking for a return on investment then it's a no-brainer to look out of California, of course. It is simply too expensive to invest here in state for buy and hold, especially in Santa Cruz/Bay Area. Does your future ADU provide a solid return? I'd love to hear numbers on cost to build and rents. Message me if you'd like more info on markets where we invest.

I can't help only because I am in California but my advise is "don't hire the first agent you meet that sounds nice!" Do you due diligence on both your deals and agents! I also won't sign a broker agreement anymore with agents I work with out of state unless it is for a specific property they bring to the table. This is a win-lose scenario because no other agent can bring you a deal if you sign an agreement with one agent. Hope that helps. 

Hi @Account Closed brings up a great idea to begin building wealth through real estate. We started with house hacking (Airbnb) years ago and found tremendous growth running that business. It allowed us to buy more properties in the future. Any type of active investing (outside of something in your home like a roommate or part time Airbnb program) becomes quite time consuming very quickly and it can actually hinder your personal growth since you are working on a PhD. Give your time to one thing and most often you will take it from another. 

I recommend house hacking or out of state buy and hold investing, the latter can be extremely passive and with a lot less risk. Feel free to message or call me for more details. I would not mind telling you about the markets where my wife and I invest. I have found that people want to buy close to home for a decrease in risk. Experienced investors know that proximity does not decrease risk, but due diligence can. 

Buying a home now in this Bay Area market with the sole idea of making money makes me very nervous! I am also not flipping in this market either and won't unless an obvious home run comes across my desk. While one can still make money in this market, one can quickly lose their shorts and it can take several years to get a new pair of shorts..

~Mike Bargetto 

@Chris Monroe I only see one photo of the front of the home. Do you have more to share? When does the lease expire? Thank you. 

 What we don't know is what those taxes will be in the future. That uncertainty, and the government ultimately having that control over my money is enough for me to pay off Uncle Sam now and not have to work with him in the future, at least on this topic. Again, the returns on our rentals far outweigh the taxes/penalties+stock market returns. Plug that calculation into an Excel sheet and see for your self. That was all it took for me to cancel ALL retirement accounts. My CalPers firefighter retirement is my last one which I will close out on a lower income year to minimize the taxes (brackets). Consider taking $200,000 earning 6% in the stock market and compound that in Excel over 35 years. Then, cut that $200k in half (taxes/penalties) and compound the now $100,000 at 25% (rei) over the same 35 years. Who wins? Plus you have more freedom with real estate if you do need to use that money for emergencies, other opportunities, etc. 

The key take away is the overall lack of stress my wife and I have since we aren't directly tied to the stock market anymore. It's fantastic knowing that more emphasis on real estate rental income will win against any other option.  

We just took our final draw on our retirement accounts, IRA's and 401k's. I am 34 and my wife is 31. The tax bill is going to be over $100,000 from these accounts alone but we want full control over OUR money. Investing that much capital and waiting 25-28 years isn't in our plan(we weren't re investors when we started them). With internal rates of return on REI being North of 20% in the first year of ownership, paying the penalties/taxes up front far surpasses a) being subject to waiting until "retirement age" to collect, and b) being subjected to future tax rates for said accounts. For us it was an easy decision because we have a plan. These funds will only lead to greater wealth creation faster due to an increase in control. Hope that helps.

@Kenneth Kim I am in Santa Cruz myself. Locally, I work as an agent in Santa Cruz and I actively invest out of state. Feel free to shoot me a DM and I will send you my contact info or just Google Bargetto Real Estate and you'll see my number. I look forward to chatting with you.

~Mike 

...