All Forum Posts by: Jonathan Kim

Hi, it's amazing that you saved up quite a bit of money and started to look for properties. I aspire to do the same once I graduate the university I'm attending. 

Since you're in an expensive area(California) and looking to invest with 15-25k, it would be pretty hard to find properties, especially on the MLS. You might be able to find properties that are a little distanced to major cities in California.

I read from Brandon Turner's 'The book on renal property investing' that even in expensive markets, people who earn relatively low income (for ex. Baristas, mailman, etc) still need a place to live. I would try to identify those markets in California. Then again, since California is a difficult place to invest for beginning investors, you would have to do a lot more due diligence. The laws are not landlord friendly. I know there are some investors who are thriving in the California market, and if you could get to meet some of them, that would help you greatly.

I think California is a great market for those who can identify opportunities that most would shy away from, or cannot identify. Although California is loosing a great number of people, the state is still a huge economy, and those who identify hidden opportunities and have experience will thrive.

I agree that owning a property and not being able to find 'good' tenants is scary. Hence the reason why it's a good idea to buy a house hacking property where the monthly payments on an FHA loan over 30 years would allow you to 'survive' if you made mistakes and could not find tenants, or overpaid for a property.

As for the questions, I'm not a investor yet, but I did read everything I could get my hands on about real estate, and I believe:

1. It's recommended to buy your first property through the MLS even if that means you're not getting a GREAT deal because you are likely to make mistakes on buying your first property, and you would rather buy with an agent's assistance than on your own.

2. Advertising yourself, such as on websites like Zillow, or Apartments.com, or just hiring a reputable property manager to advertise for you. I heard putting 'For Rent' signs on the property might get your property vandalized(because it means it's empty), so it might not be a great idea.

3. When I analyze deals on the market, I use the BiggerPockets Rental Calculator. I would watch a few videos on youtube from BiggerPockets on how they use the calculator, and start analyzing 2 deals a day, maybe even more. When you start using a calculator, you would know how to estimate expenses like Capex, utilities(multifamily: if the utilities are separated), repair costs, vacancy, etc.

Lastly, it's really important to have cash reserves of 6 months of expenses before you get started.

I hope this helped, and please correct me if I'm wrong! Thanks :)

Hey Jonathan,

Congrats on your decision to get into real estate investing! Here are some tips from my experience as a remote investor from California:

1. Picking a Market: Consider your budget when investing in California. While you're likely to see appreciation, prices are high and cash-flow is scarce. Investing in an out-of-state rental property could always be a way to build some equity and momentum into eventually buying your dream California prop. 
2. Finding Renters: My experience with this is easier than you may think. I invested in a rental property across the countries because the prices in CA were high and the cash-flow opportunities in cheaper markets were much more attainable. I was able to market my property online for free on the Zillow Rental Manger website. You can also consider hiring a property management company if you don't want to handle tenant search and management yourself. If you do, my tip is to interview them and carefully monitor how they manage your rental income, repairs, and tenant communications.
3. Calculating Costs & Building a Team: Consider all costs associated with the property, including mortgage payments, taxes, insurance, and maintenance. Aim for a monthly rent that's at least 1% of the property's purchase price. To build a team, ask for recommendations from other homeowners or your realtor.

Remember, take it step by step, learn as you go, and don't rush into a decision. Real estate investing is a long-term game. If you have any more questions, feel free to ask! 

Best, Anthony

@Jonathan Kim one strategy I read in a book on testing a market was this: Post and ad in the area you plan to invest in and see what kind of volume of response you get.  Now some may say it is unethical to advertise a property that really doesn't exist which I am not saying it is or isn't but it is a strategy to A) see how much excitement or interest there is in the area. B) see if the amount you are asking for rent is too high (not receiving many calls or people complaining about the price) or too low (tons of contacts anxious and ready to move in ASAP mean you're price is probably lower than average for the area).  The author than goes on to say that, you do a quick prescreen on the people that inquire which gives you practice and also helps you see what types of clients are looking to live in the area you select and how qualified the clients actually are.

Again I have never used this strategy but it did work for this author and he recommended it for testing new areas.

The author was Zalman Velvel and it was in Creating Mobile Home Wealth