All Forum Posts by: Account Closed

Thank you for sharing a great story, @Erich Beyer. Congratulations on your success thus far and best of luck in the future. 

- Chris

@Monica Wright

Welcome to BP, Monica. As someone who has been there, I have to say I appreciate you candid comment regarding the W-2 income. Congratulations making the commitment and focussing your efforts on sharpening your REI skills. I recommend spending some time under the "Learn" tab above. There are many great resources available including the podcasts and some ebooks, which I found to be quite valuable. In addition to the resources, there are many experienced and savvy members on BP who are willing to answer questions and share advice.

Best wishes, 

Chris

@Karl Johnson

Greetings Karl.  First off, if that's you in your profile picture congratulations. I have much respect for service men and women. 

With regard to your RE question, its rather open ended.  Great thought on researching RE for at your age for long term wealth, but I would suggest absorbing as much knowledge as possible before committing to a property.  Responses to your question will depend on more detailed information regarding your specific situation (down payment, credit, income, location, neighborhood, etc).  In general, house hacking is advised for those just starting out, but definitely learn as much as you can before making a move (or get it for a really good price, which ever comes first). 

Being 17 yrs old, I'm not sure how attractive you'd be to the banks, especially if you've not had a consistent employer for the last several years (one question they ask during pre-qualification). If you're military, the VA loan might be an option for you also.

Lastly, many of your questions are addressed in the resources located under the "Learn" tab above.  Check out the podcasts and the free ebooks.  The value they've added to my education is priceless. 

Best of luck, 

Chris

@Derek Jones

Thank you for the insight, Derek. My wife and I are currently searching for a primary residence via FHA, but we weren't aware of the 3% loan, 0.5% down.

@Stephanie L.

I think I may be able to provide a bit of insight as I have previously staggered through this area of REI. First, you should be aware that all RE attorneys are not created equal. There are attorneys out there that are practically begging for clients (a.k.a. paychecks) and will say they're knowledgable about any and all things real estate just to get you to hand over a check. The vetting process for RE attorneys is critical for success in both the short term and the long term. In addition to reviewing RE attorneys on yelp and from Google searches, I also asked the forums on this site for reputable attorneys in my area. After receiving some feedback I contacted a couple of legal offices and asked some basic, but pointed, questions regarding real estate investing. Even though I was inexperienced with regard to identifying the qualities of a good RE attorney, I was able to eliminate a few of the bottom feeders based on how they (or their secretaries) answered my questions. Rule of thumb, the more vague a response is to a fairly pointed question, the less that person understands about the matter.
  Once you find a good RE attorney, be prepared to pay him/her, as Robert Kiyosaki indicates in one of his books.  If you complain about the cost of a good RE attorney, you're not ready to do serious business. 

In response to your other inquiry about LLC vs C-corp, I am in favor of the LLC. I'm not an expert on this subject (though my wife was the top student in her corporations class in law school at the best law school in the country, but I digress), but many RE investors choose this method of asset protection. LLC's are easy to set up, though there are different strategies, some of which may not be allowed in your state. For example many investors use a DST (Delaware Statutory Trust) and/or a "series LLC," but a DST is not available to residents of CA. You could also create a family trust with your family trust attorney, then have your RE attorney set up an LLC which can be controlled by the trust entity, thereby allowing for complete anonymity.

As a final thought, I'd advise finding out as much information as possible on LLC's and asset protection strategies and structures before talking to an attorney about this issue.  The attorney will be happy to take hours of your time educating you, though this education will come at his/her hourly rate.  

Best of luck,

Chris

      Which type of financial product allows for 0.5% down? 

@Jonathan C.

Welcome to BP, Jonathan.  This is the source for RE knowledge.  As I always suggest, check out the "Learn" tab at the top of the page. There you will find some really great free resources such as links to the podcasts as well as some free ebooks. 

To address your question regarding out of state investments, @Account Closed (successful and reputable RE investor around here) once stated something to the effect of, "out of state is where California RE investors go to lose money." Its easy to be intimidated by bay area RE prices, but if you check out the average bay area home value for the last 25yrs you'll see quite quickly that the appreciation in this market is exceptional.  In most (the vast majority of) other markets appreciation is considered a gamble, not necessarily so in the bay area.  The trick is to figure out how to get in on it. (Btw, Minh, thanks for enlightening me on this topic).  Save and create other passive income sources so that you can buy in on a local property. 

Good luck and best wishes

@Chris Jones @Ryan Landis @Joe Bertolino

Great discussion, gentlemen.  I thought I'd offer my two cents as my wife and I have been plugged into the San Jose market for the last 6 months as we have been heavily scouring the area for a primary residence.  In addition, we've been in consistent contact with several RE professionals associated with the industry including agents, lenders, etc.  Based on our interactions with these professionals, as well as our findings via personal research, we've learned that the market has slowed in the San Jose are more than expected since this past summer.  House hunting this past summer has offered us some great learning opportunities about the bay area RE scene. One of which was that during this past summer season (June, specifically) the RE market was hotter than anticipated (referencing the input from our RE associates).  In fact, a house we were going to bid on was listed for $599K in San Jose and had over 10 bids on it within 12 hours of being on the market.  Each of these bids were $700K+, most of which were all cash, no contingencies.  In fact, all of the properties we were watching from June - Aug were traded for higher than asking.  All things considered, that's indicative of an inflated market by my opinion.  Also, during this past summer our rent (apt complex) increased by $500/month for a year lease.  Could these circumstances have been the manifestation of the high water mark for RE in the San Jose area?  That's what we've been discussing for the past several weeks.  
  Fast forward to current market conditions.  The current market is cooler than expected.  Not only is inventory down, but 100% of the homes listed are no longer being traded for inflated prices. In fact, several properties that we've been watching have sold for considerably less than the original asking price, which was a bit surprising.  In addition, our apt. complex is experiencing slightly higher vacancy at this time.  Did the increased rents over the summer have an unforeseen negative impact on current vacancy? 
  The question remains, is this trend just a normal seasonal slow down, or is the bay area RE market in decline overall? Although everyone can offer their own opinions, I think its only fair to compare y-o-y scenarios before we have a true understanding of the pulse of the market, at least in San Jose. In other words, I think we'll need to wait until next summer to draw an accurate conclusion about San Jose RE market trend. 

@Sean OToole

You mentioned you have a diagram regarding this context. Is this diagram available online? 

@Orion Walker

@Kyle Rosseau

Hello gentlemen.  I think a real estate accountability group is a fantastic idea. As a disclaimer, I'm not affiliated with any professional RE organization and I am re-establishing myself since moving to the bay area.  I do not have extensive capital reserves, am quite busy with work and family, do not currently own any investment properties, but am very interested in learning more about RE.  

- Chris

I've asked this question before ....

http://www.realestateinvestorlaw.com/Attorneys/

They're not based in the south bay, but have great reviews and can be reached via phone if needed.