All Forum Posts by: Jimmy Liu

@Jimmy Liu hey Jimmy! Welcome to BP! Your story sounds very similar to mine here in SoFlo. I too house hacked my primary property and drank from the fire hose. My first tenant actually ODd and I had to perform CPR while waiting for paramedics! Pretty wild and I learned a lot 😬.

Anyways, I am investing out of my market as well and my first purchase this year was through rent to retirement on a new build in Cape Coral FL. CApe coral is simply exploding with out of state people moving there and low price points. The new build cost $265k in total, required only 10% down, and has rents at about $2300 right now. Post construction appraisals are also between $340k and $410k depending on location. Would be happy to connect about my experience if you’d like. I felt safer going through a turnkey company for my first out of market rental. Good luck!

Patrick

I've definitely seen Rent to Retirement's new construction opportunities in Cape Coral! I've considered Turnkey as well and have spoken to some of the folks at Rent to Retirement. Let me connect with you 1:1 as I have some questions about your decision.

Thanks for sharing!

8 Votes

Originally posted by @Brian Larson:

Hi @Jimmy Liu- I live and work in San Jose. I just made my first investment out-of-state (OOS) in the Pittsburgh Area. I highly recommend that location because it is a low-cost entry point for investment and has a good chance for appreciation in the coming decade. CBRE recently placed it #8 on tech development and investment in the coming years.

Plus, I just fell in love with the place when I visited. If you wanna connect with a good local investment realtor, I highly recommend speaking with @Max Feinberg. He's been great. I also have a property manager. Send me a message if you want that info too.

I went through much of the same process that you describe above. I looked all over the central valley for rentals. Even with my self-representation as a licensed realtor to purchase something, nothing really made sense. In other words, I could get better cash returns OOS so that's what I did.

Brian! I recognize your name from reading the BP forums on San Jose ADUs & Pittsburgh Rentals. I actually live in San Jose right now and, in considering possible exit strategies with my condo, was looking SFH w/ADU potential.

I was also planning on visiting Pittsburgh sometime early next year. It's promising to hear that you like as well. In the tech sector that I work in, I hear a lot of promising things about Carnegie Mellon. I see too the university is making some interesting moves in incentivizing students to stay in the area & start businesses which looks promising to me.

I'd love to connect to hear about your experience both locally in San Jose & Pittsburgh. Thanks for the referral as well! I'll be reaching out to Max too.

0 Votes

Originally posted by @Melissa Roybal:

Have you considered househacking a 2-4 unit or a SFH with an ADU in the Sacramento area? Depending on your situation and how flexible you are, I would 100% start with househacking in an expensive state like CA in any of those areas that you mentioned. I would recommend starting off by talking to a lender to see if you can do a 3.5% FHA loan and househack. If you are looking to stay in the Bay Area and invest in another location, you may want to consider broadening your search. If you are getting property management, it makes no difference if you are 4 hours away driving or flying. What you have to be very careful about is ensuring you have the right team in place. Best of luck and congratulations on taking action!

A 2-4 unit house hack in the Sacramento Area sounds ideal but probably isn't feasible in the short term. My job requires me to be tied to the bay (not a beneficiary of the remote revolution unfortunately). I am also unsure if I'd be able to borrow enough to afford a multi-family with my primary residence. Long term, I think this is something I'm interested in - but for now I think it'd be more wise to leverage the high W2 income elsewhere. I am hoping to replace generate enough income through cash flow first that I can focus on this full time.

You are right thought that central California vs OOS makes little material difference if I'm putting property management in place. This is why I've been doing some due diligence on other markets in the Midwest.

And Thank you! It's been a delight meeting you and the rest of the BP community. It's great hearing people's feedback and I hope I can contribute with my own experience in a few years.

0 Votes

Originally posted by @Max Gradowitz:

Have you considered central CA? Northern and Southern CA tends to be too expensive to cash flow, but there are some areas of central CA that cash flow. Multifamily tends to be more profitable "bang for your buck" in my experience, but of course more tenants to manage. If you are using a management company anyway (which I always recommend, it's money very well spent) multi is the best way to go in my opinion. There is no real difference in lending as long as its 4 units or less. And yes, 20% is the norm for non-owner occupied mortgages, regardless of whether it's 1 single family home or a 2-4 unit property. I've seen people talk about less than 20% down non-owner occupied loans, but I have never actually seen it offered by any reputable lenders, so plan on putting at least 20% down. That's the norm.

Hi Max.

I have considered Central CA - mostly Merced due to the the university expanding, the med school that's coming, and the high speed rail (if that ever finishes...) But I found it tough to find examples where the numbers make sense. It seems that after capex, vacancy, & property management the cash flow just vanishes. At least for SFH. Also while I'm bullish on further appreciation in Merced due to the reasons listed, I find that historical recovery has been slow. According to Case Shiller, Merced's market has only just recovered from previous highs. Compare this to Sac or Bay Area, it feels riskier because the university's continued success is the only driving force I see for appreciation.

I am interested in the opportunities that come with ADUs & SB9. I have not done any due diligence on running numbers with these opportunities in mind. I would not be opposed to buying in Merced and then adding housing.

What areas in Central California do you suggest I look? Open to suggestions & ready to learn.

0 Votes

Hi All,

My name is Jimmy and I'm new(ish) to real estate investing! I'm a 25 yr old who recently moved to the Bay Area, CA for a job to turbo charge my W2. Last year, I bought a condo in the area with an extra room I'm renting out. So not completely green but the year has definitely been small trial by fire, drinking from the fire hose experience. Currently learning & reading a ton. BP has been super helpful on this.

With some income saved up (~60k), I'm hoping to get into purchasing additional real estate soon. My primary target is out of state as I want to jump right in and find cash flowing rentals and NorCal market isn't the greatest for this. Budget is up to ~300k based on my DTI. I also have the ability to save ~1-2k a month based on my budget. I'm looking primarily at Kansas City, Indianapolis, and Pittsburgh. I'm reading David Greene's book too on the topic!

Questions I'd love to get feedback on.

What are the differences between SFH & small multifamily? What would you recommend starting out with? Given that I'll be looking to put property management in place, I imagine the actual operations would be minimally different. Though I've also heard that there are some differences in terms of lending.
Given that the property won't be owner occupied, I am thinking that my only option is to put 20% (or more) down. Is this correct?
I've looked for deals in more affordable areas in Northern California (Sacramento, Merced, Stockton) and none of them make sense as initial investments due to poor cash flow. It seem that without growing income, scaling up will be slower. Has anyone had success in buying in these markets? Especially with my budget.

I understand that the first deal is really important to build momentum and so I'm excited to get started! I'd love to meet y'all.

Best,

Jimmy

7 Votes

All Forum Posts by: Jimmy Liu

Jimmy Liu has started 1 posts and replied 5 times.

Post: Newbie from the Bay Area!

Post: Newbie from the Bay Area!

Post: Newbie from the Bay Area!

Post: Newbie from the Bay Area!

Post: Newbie from the Bay Area!