All Forum Posts by: Jake Andronico

Quote from @Shubham Porlikar:

Quote from @Jake Andronico:

@Shubham Porlikar

Welcome to BP! 

1. The cash you have to deploy (and what % of your savings that is) is completely up to you. 

2. You should contact a few lenders who will ask you to apply. This may be a soft pull on your credit, but it's worth it (in my opinion) to determine that question. 

Talking with a reputable lender will help you answer both of these questions, although the first is much more up to you and your comfortability. 

 Thank you for the response!

1. Following up, of the amount that I decide to invest from my savings, how much should go towards down payment and how much should be reserved for repairs. I will not be going for a flip but mostly a property which requires none to cosmetic repairs.

2. I haven't decided on the city/zip code/neighborhood in which I will be investing. Would the best way forward for me be first to finalize the neighborhood in which I invest and then reach out to local lenders in the area and also talk to the bigger banks there?

I am mainly trying to understand the chronology of steps to take for my first investment.

1. That is totally up to you. I recommend 3-12 months of expenses, but other investors will tell you that's too conservative, and others will have more. 

2. Starting with a lender will be able to help you determine what you're able to purchase, which will ultimately narrow down the area you're potentially looking in as well. If you qualify for $3mil, your options are much greater than if you qualify for $300K or less. 

Hope this helps! 

@Chad V.

This definitely aged well. Instead of employing 6,500, it's about 11,000. 

They just broke ground on Nevada's first vehicle manufacturing facility out there to build and develop the Tesla Semi Truck! 

Should add an additional 3-5K jobs. 

Definitely a great strategy to pay attention to. I believe that Tesla has fundamentally changed Reno/Sparks. 

@Shubham Porlikar

Welcome to BP! 

1. The cash you have to deploy (and what % of your savings that is) is completely up to you. 

2. You should contact a few lenders who will ask you to apply. This may be a soft pull on your credit, but it's worth it (in my opinion) to determine that question. 

Talking with a reputable lender will help you answer both of these questions, although the first is much more up to you and your comfortability. 

@Joey Sabatini

There is no right or wrong answer. People make money in every approach to RE, and people also lose money in the same way. 

What are YOU comfortable with? What do YOU understand? 

The Bay Area is going to be an appreciation heavy market. Two big, very important questions are: 

1. When do you want to retire early? 

2. How much do you need per month? 

No need to overcomplicate it. Answer those two questions and work backwards from there :) 

Best of luck to you! 

@Srinivas Reddy

Wanted to throw out a suggestion. The beauty of a 1031 exchange is it's not an all or nothing endeavor. 

Always check with YOUR CPA, but my understanding is that you're able to 1031 exchange what you want, and take "BOOT" on what you don't. 

For example, you could pay the portion of taxes on $1mil and successfully 1031 exchange the other $1mil. 

You could play around with that idea and diversify more to not put all of your eggs in one basket, but have the benefit of deferring taxes through a 1031 exchange and having your money working for you elsewhere if you want it. 

@Dave Foster, can you confirm that this is possible? 

If you're looking for a 6 cap, I just sold a multifamily property that was over a 7 cap in Reno, NV and also just got into contract on one that is over a 6 cap at current actual rents.

They are out there, and you have an advantage with cash. 

Whatever you decide, best of luck to you! 

@Nakul Patel

Welcome to BP! SoCal and Columbus OH are two incredibly different markets. 

People are having success and failure in every market. 

If you have enough money to purchase something in So Cal, I'd recommend exploring the option of purchasing something elsewhere potentially in cash. 

We've seen some pretty amazing deals on market from sellers who just want to offload their property here in Reno, NV. 

Section 8 has pros and cons. A lot of investors in here that specialize in it. Some helpful responses with the positives and negatives above. 

@Ola Inyang

Welcome to BP! You're in the right place. 

Posing that question with being open to the US, you're going to have a lot of agents pushing their area :) 

People are making money everywhere across the country. You need to find out what's right for you and your goals. 

Finding what you don't want is just as important as finding what you may want. 

I'd recommend house hacking in or near your area to start to narrow your focus. 

For me, I grew up just north of San Francisco and decided to live and invest in Reno, NV. I wanted to be close to the Bay Area but have better landlord tenant/laws, strong appreciation, low property taxes, diversified job growth, population growth, etc. 

It may not make sense for you, but people are definitely sleeping on Reno. It's extremely different from 10 years ago. 

Whatever you decide, make sure it is YOUR decision. Best of luck to you!!

@Scott Scoville

Wow, that's a sizable project. Turned out amazing! Congrats!!

@Anita Z.

Great question. I think increasing in small increments slowly over time makes more sense than waiting multiple years and resetting to the market (assuming you're able to to that in SF). 

If you're slowly increasing but still slightly under market, have a better product, or better service (or all 3) and have rental comps to back it up, if they start to ask you can highlight these points. 

I hope this helps! 

@Gabriella Pellolio

Congrats!! You're already ahead of the curve. Being a homeowner (especially in your area) is impressive. 

Debt adds potential risk and potential reward, so it's up to you on your comfortability. 

I would continue to learn and explore different investment strategies to see what makes the most sense to you, and what you may potentially enjoy. 

There are a ridiculous number of options, and all have success stories and horror stories. 

With my experience with very wealthy individuals who have complete freedom of time, one common denominator is: Keep it simple and a little boring. 

Nobody really pushes the strategy of buying single family homes and paying them off (besides Chad Carson and a few others who are awesome), but 2-5 paid off single family homes are probably pretty life changing. 

Having an end number/goal in mind will better help you know the next step. 

I grew up north of San Francisco but moved to Reno, NV to live and invest because of it's proximity to CA, low property taxes, stable job growth, diversified population growth, lower prices, strong rents, much more landlord friendly tenant/landlord laws, etc. 

Congrats again and best of luck to you!