All Forum Posts by: Becca F.

I never really noticed reverse trolling. Most of the posts are read and respond to are from people looking to buy their first investment property, usually California investors. I notice more of the spam or sales pitches in response to them.

By the way, I'm starting my cat tree flipping business. My business partner is orange and white and likes to chase mice - she ran the numbers and the ARVs are solid.  Who wants to join?  Hahaha :) 

 I completely agree with this. I hadn't read the Baltimore story before...wow.

Hi Sathiya, some thoughts: 

- attend in person meet ups in the Boston area to talk to other investors who buy locally and out of state to get their feedback and maybe consider looking within a 2 to 3 hour drive. 

- cash flow is difficult now with long term rentals even if you pick markets that have lower purchase prices than Boston. The cash flow on paper is often much different than reality. I've talked to lots of California and a few NYC investors that have lost money (including myself) who bought inexpensive properties in the Midwest mostly and a few in the South (Class C is volatile). 

- some strategies I've seen California investors use to lessen negative cash flow: house hacking, mid-term rentals (people temporarily displaced from home renovation or insurance reasons like fire), rent by the room, Short Term Rentals. 

- The ultimate house hack, live in the small ADU unit and rent out the two levels of the main house on AirBnb in San Francisco (I would have thought STRs are oversaturated in S.F. but it worked for them and they stay fully booked). The down side is that STRs are more work, need to furnish it, pay for utilities and WiFI but in the right market (vacationers and business travelers) it could work.

- If I were looking at cash flow as a really important important metric, I'd consider starting a business. I prioritize appreciation, tax benefits (rental property expenses, depreciation), ability to use leverage, and passing on generational wealth with real estate. 

I've had several "deal killers" who gave me numbers and walked a few OOS properties for me. I thought that since I did a local renovation that I'd be ready to do a BRRRR or flip in Indianapolis... nope. I was going to attempt my first flip and decided I didn't have the risk tolerance. I was given realistic numbers for ARVs, renovation costs, median rents, etc. Outside of my one renovation, I didn't know that much about construction - I've learned a lot in the last 2 years.

I've acted as a "deal warning person" to many new California and a few NYC investors who I've talked to in person, Zoom, and phone calls who want to buy the Midwest or South because the price points are lower.  My advice to them is you really need to know construction and walk properties (not just look at videos and photos), know the area, have an unbiased local investor do a walk through (if you can't fly there in person), and how to read inspection reports and get a sewer line scope. 

I hope that they listened to what I said - one recent person who is house hacking decided to look within a 2 hour driving distance instead of buying over a 1000 miles away. 

I just did this exercise - I liked ranking them so I could look at the big picture. I dislike the door count as a metric also. My RE journey over 2 years ago was to acquire lots of doors and I've completely changed my strategy. I actually sold a Class C a few months ago - I saw the writing on the wall after one Class C, very likely no capital gains after all my passive losses. No more inexpensive Class C properties OOS for me. 

I had a couple of people suggest to me to sell my appreciating Bay Area SFH so I could acquire more "doors" and theoretically "cash flow" more with OOS properties. Going into the unknown and buying multiple SFHs/duplexes or an apartment complex OOS and my property taxes will skyrocket (property tax is reasonable thanks to Proposition 13 in CA). Raising the rent and value add on my higher quality properties will get me more net rental income than continuing to buy.

Happy New Year!

I have gone on MeetUp.com and Facebook. I just went on MeetUp typed in "real estate meetups" and there were several for the LA area. Facebook groups may have in person meetups or Zoom video meet ups. A few of them seem somewhat spammy to me (e.g. people constantly posting about properties they're selling at a discount) and not much helpful advice. 

If you have difficulties finding local meet ups, DM me and I can reach out to my network with my SoCal investor friends. 

@Denise Lang

I'm not sure what part of California you're located but I invest in the Bay Area and Indianapolis metro area. I've had mixed results with Indianapolis. It's referenced in one of @Nicholas L.'s posts

So far I haven't had any issues with my tenants here and my properties are located in a very pro-tenant law city. There are nightmare stories but most of the CA investors that I know haven't had major issues. Otherwise they'd all sell and invest OOS or get out of RE entirely and many of them have been investors for 20+ years. One of the disadvantages is if I add an ADU to my single family rental, it's considered a 2 unit and under rent control so I decided not to do that considering all the construction costs. This rule differs from city to city. Vetting the tenants and following local laws is extremely important.

If you don't own a primary residence, would you consider house hacking (buy a single family and rent out the rooms or a duplex and live in one side/rent the other? If you're in the Bay Area, Sacramento and the Central Valley are all within a 2 to 2.5 hour drive and price points are much lower. 

When you mentioned that you don't have a lot of money to start with, I'd recommend focusing on increasing your current income and decreasing expenses. I'd suggest attending local meet ups so you can talk to people who invest in CA and OOS. Some of these investors might let you walk some of their projects. Knowing about construction, how to pick a good inspector and read inspection reports will save you a lot of headache/money -  it's difficult to invest in RE just by doing things online.

Feel free to DM me if you have further questions. Happy Holidays!

Great question. I'm looking into possibly doing a 1031 or reverse 1031, have kind of identified potential markets. 

What are fees associated with the Qualified Intermediary holding onto this money? Does it outweigh paying the capital gains tax? Do capital gains offset passive losses that the investor has, so someone really isn't paying a high capital gains tax as they thought? 

@Shaylynn O'Leary

Being a realtor you have an advantage of staying local.  I also watched Chad Carson's videos about being a small but might investor. I understand being in high cost market and it being difficult to buy but the "cash flow on paper" inexpensive markets is a gamble. I talked to numerous California investors in real life and phone/Zoom calls who have lost money in far away OOS markets, mostly Midwest markets (e.g. repairs, capital expenses, bad tenants, properties vandalized while under renovation, evicted tenant stole all the appliances, property managers with high fees or overcharging for repairs). To be fair, I'm not saying the Midwest is a bad market but you have to be really careful where and what you buy. 

Some Bay Area investors I know are: house hacking, rent by the room, mid-term rentals, STR (depending on your location AirBnbs may not work). One of the smarter recent strategies is the owner is living in the ADU and renting out both levels of the main house on AirBnb.

I invest in the Bay Area and Indianapolis metro area (Class A suburb and Class C). I've posted many times about my experiences. I changed my strategy from 2 years ago of acquiring more doors and "cash flow" to now looking at the asset if I continue to buy. 

Feel free to DM me if you have questions about Indianapolis :) 

With East Side, Christian Park and Emerson Heights (but I sold this one). I recommend visiting in person and getting to know Indianapolis on a detailed level, establishing a trusted team and meeting them in person (or at least Zoom calls). Much of Indy is street by street. I don't recommend buying a property sight unseen unless you have a high risk tolerance.

I've found the property tax rates a little high, 2.78% on East Side and 2.70% for my Class A suburb so that does affect cash flow. The question is do I keep  holding onto these properties for appreciation, especially the Class C?

I meet in person lots of CA investors who invest here as well as OOS. I don't think there's one solution for everyone. DM me if you would like more info :)

I rented out my Indianapolis suburban home in 2019 when I moved back to California. My property taxes went up 2.7 times once the county found out I was renting it out - it took about 2 years. My initial net rental income was $402 a month to $224 a month. It's now at $121 a month. I lost the homeowner (called homestead in Indiana) exemption, mortgage exemption and another exemption. My property tax rate is 2.70% 

I have a great tenant so I haven't done large increases (like $150 or $200) since I don't want a unit turn but I'm in the market rate range. I'm not factoring in a percent for vacancy, repairs or capital expenses. The net number is rent minus mortage PITI, property management fee and HOA fee). I'm not sure if I should call that cash flow. I'm keeping this property for the appreciation (in a high demand area with great schools) and low interest rate for now.

 Even with high property tax rates, the deal can still work.  I have California investor friends buying in Texas (Dallas and San Antonio).