All Forum Posts by: Jacob Paulson

Hi, 

We're a couple in north Orange County and would like to invest in a rental property closed to our primary residence. We've been reading a few Real Estate Investing books and hoping to get some advises/guidance here.

About us:

- In our early 40's, primary residence is a SFH we purchased for 750K with 20% down, now value at 1.25 million, with mortgage balance of 425K (refinance to 15 years fixed 1.99% in September 2021). Monthly payment $4,000 (including property tax and insurance).

- Our W2 income is about 480K, both working full time M-F.

- Hubby owns a consulting business, income 65K-100k.

- We have about 1 million in our 401K, 403b, and other retirement accounts (95% Vanguard index funds). And 800K home equity as above.

- I also have a pension plan through my work. 

- We maximize our 401K, 403b, HSA, Roth IRA, and 457 accounts.

- We have 230K in high yield saving account, and we're saving around additional 8K/month from our net income. 

- We have 2 children (ages 9 and 11). We do not have any other debts (2 cars 2012 and 2020 with no payments).

- Our credit scores are both >800.

My hubby and I have many family members and friends in other states who invest in rental properties.  We have been playing it safe but really would like to start investing in Rental properties as another source of passive income and to start building for our children.  Given our circumstances, would you recommend investing in another single home or a multi-unit (like a triplex or fourplex)? We're hoping to only use our 230K saving and not borrow from 401K or home equity for a down payment?

Also appreciate any investor broker or lender tips! Thank you.

How are you investing in Southern California? Only reason so I can learn wile investing near by. Currently owner occupied thinking of converting garage into an ADU and buy 2nd home owner occupied

I just have a question for anyone active in SoCal; Are there any areas in southern/ central California where long term rentals cashflow, or is that impossible now with today's interest rates? Most of the deals I see the numbers don't quite add up, or break even at best. I've been told that the working strategy in SoCal is to break even after all expenses, and the appreciation and equity is where the money is made. Rather than other areas of the country where property might cashflow but not have as much appreciation. Is this true? Looking at 2-4 unit. Thanks for your help.

 Thanks Jacob, we have bought houses this way twice and both cases they were in pre-foreclosure.  It would be the same for Foreclosure, just the reinstatement amount could be higher since there would be a longer period of missed payments.   

You mentioned that your concern was with the smaller loan company calling the loan due. This is part of your due diligence BEFORE you purchase the property. Subto works best with the big banks. Everything is automated. Jamie Dimon does not know that you bought a property with a Chase loan. You would get the loan info online and pay the mortgage auto draft every month. Nobody at Chase knows anything.

Make sure that the loan you are taking Subto is a bigger bank. If it is a smaller bank or personal type of loan, bigger risk of calling the loan due.