@Jack Jiang The Bay Area is a different animal and the rules and strategy are different than the generic stuff on BP. I own properties in Berkeley, Oakland, Fremont, Milpitas, Mountain View and Los Altos. All of these sub-markets are different, your general strategy can be similar but you have to create specific game plans for each market. My general plan is "buy and hold". This translates to playing for appreciation, pulling cash out of the those properties and then re-deploying those funds.
At the beginning of your investment journey you either need time or money. It is great if you have both, but generally people starting out have more time than money. This time, in a "buy and hold" strategy, needs to be converted into sweat equity. Further extrapolated, "pain = profits". This pain is going to be either in you labor, legal fights, tenant issues, but most likely a combination of all of them. If you are not willing to go through the pain then look for a different market.
If you are willing to deal with all of the headaches and fight for years, my experience has shown me that there is a pot of gold on the other side. But you will need to start in sub-markets that might not be where you want to live right now. There is no easy path.
The good news is that you have a base to start from. As suggested, go with a HELOC and not a cash out refi. The reason is that, if you get a good lending rate, you can refill a HELOC by paying it down and then deploy the money again. I have written about my process on BP several times and you can look those up. But in general, I pulled a HELOC, used the money to buy another property, seasoned the property and got new debt on that building. I then paid down my HELCO. The benefit for me was that I looked like a cash buyer and made me more competitive during the bidding process.
Prices are not going to come down in the near future. Most people are locked into 30 year fixed rate mortgages under 4%. This alone will constrain the supply side for a long time. Even if the Fed drops rates, it will be in very small increments and will probably take years to get back to below 4%, if ever.
Regarding buying into syndications, I have invested in several out of state. I use this as my strategy to invest in far off markets. In the past, I have made some very good money. But keep in mind syndicators are in a world of hurt right now because of the rise in interest rates. Also keep in mind that your money is tied up in the deal until the GP decides to sell. There is less management pain for you, but there is also less freedom.
Without knowing more about your situation it is impossible to give you a specific plan. But I can tell you what I did. Get roommates while you are young. Save money like your life depends on it, because it does, and live like a monk. I spent several years, focusing on building the strongest DTI ratio that I could. Everyone always wants to get into the hunt for a deal. The reality is that to be successful in winning the deal, the financial preparation before the hunt is more important.
Good luck,
Arlen
