All Forum Posts by: Komal Sekhon

Hello, 

24 years old, BS in Biology and MS in Viticulture/Enology, Soil and Crop Scientist. First time I've had significant savings and looking at investing out of state. Can use all the help/guidance I can get! 

Thanks

Hey everyone,

Thank you for the replies. There's been a few responses that I wanted to address and explain my situation. $100k of that money saved is mine and $100k is my dad's. He's big on starting my own business or starting life on the right foot (paid for my undergrad and my sibling's undergrad/med school) so he's matching my savings to help out. I make $87k salary but my job is in the California ag industry, not easy to just pick up and move when a lot of my skills wouldn't be valued elsewhere. I have no plans to move to another state if that is where I invest. 

My goal is to invest in LTR so I am prioritizing cash flow over appreciation as I wouldn't see those gains for years to come. @Carlos A. My idea of good appreciation is between $600-$1,000 net positive per month (with all $200k invested, a proportionate return for any lesser invested amount). @Bryan H. My plan with focusing on a good cash flow is to start diversifying my investments and use that cash flow for good stock portfolio. I have gained the vast majority of my portion of the savings (~75k) in the last year and while I should've invested in 2023, I had other concerns: currently drive 2009 Hyundai Sonata with $195k miles and was worried I needed cash to purchase another car. Now, I know I can keep a decent chunk as reserves and focus the other portion into future plans. My dad's portion came from the last 5 months or so, so I have been looking at REI since then. I have a small amount ($5k) invested in S&P500 through Robinhood and another $20k in my Roth 401k.

@Calvin Thomas Thank you for the recommendation. I talked with my realtor and the property is currently being rented with both units totaling $1450 ($700 + $750). With rent control and just-cause evictions, I fear it's not a worthwhile endeavor. I do appreciate the work and I will look more into finding any opportunity arising in Fresno.

@Jonathan R McLaughlin (I realize my reasoning may not be sound) I have noticed a lot of these cities with good real estate investing potential (Detroit/Cleveland/St. Louis) have had declining population and demand. I would worry investing in these markets when the rates are cut could lead to more locals wanting to move elsewhere and lowering the market value of the property. While I'm more focused on cash flow than appreciation, I obviously wouldn't want to have paid more for the property than what it's worth. 

@V.G Jason My timeline for investment is the next 40 years. I want to have this become a side job that I am accomplishing alongside my W-2 job. I want to use my salary to invest into real estate and do not view this as a short-term turnaround to generate quick gains. 

@Michael Smythe

I think my message came across differently than I intended. Mentioning when my dad invested was to focus on how my dad started a profitable real estate investment strategy in my hometown with substantial appreciation and rental income. My point was to highlight that I have years of experience managing the business, but investing in the same market would mean less cash flow and/or relative appreciation. I understand I cannot look back, but my experience creates a lower-risk profile for investing out of my local area than a true newbie investor. 

I've been looking for good places to invest in Fresno, but for nearly all listing after PITI there would be a negative cash flow for any SFH or multi-unit complexes. Even properties for BRRRR wouldn't cash flow anymore than 5%, which negates the value of pulling money from my HYSA. I could potentially purchase one mobile home all cash, but renting out mobile homes is very difficult: high vacancies, low rent, and high HOA costs for utilities. This reasoning is why I am interested in real estate investing outside of my local area or the state.

**edit: forgot to include that rent by room is not very popular in Fresno. The only applicable areas would be near the university, but the properties there are much more expensive and renting by room with PITI would still be a negative cash flow for my situation.

@Caleb Brown

Can you explain why I would house hack instead of just renting out the property? I already live at home for free so my housing expenses are zero. I'm in no rush to move out and would only consider it if there was a strong enough reason (better income, good job, marriage, etc.) I know it would then be an investment property and not a primary residence, but I don't see house hacking returning more than if I still live at home? 

@Michael Dumler
Previously, I was looking at investing in SFH in my town or potentially SF apartments, but my dad dissuaded me. The appreciation potential for Fresno is nothing. He purchased apartments for 60k which are now valued at 300k but it doesn't seem like they'll go up any higher. He's staying locked into the market with his investments since his property taxes are so low, but if I invested, the ROI is so low. He also wanted me to look into areas where my investment cash flows well enough to dig deeper into the real estate market than spend all my savings on one property that barely cash flows.

It was initially his idea to invest out of state, but looking at the current market potential of Fresno and California in general (new laws restricting investors to put offers until 30+ on market, etc) I agree with him that it doesn't make much sense to invest in local real estate. 

I live at home with my parents and don't plan to move out unless I get a good job out of town. Should I still house hack to avoid the capital gains taxes? (My only current expense is ~$100/month on gas)

Hi everyone, 

A bit of a unique situation. My dad invested in rental properties from 2008-2014 and made good rental income on them. Our city has now ballooned in value and no property is renting at 1% of price anymore (300k house is renting at 2k, 800k is now 3.5k). While not with my money, I have been working on the real estate business for my dad since I was 14. I've gone through eviction court proceedings, ran thousands of background/credit checks for application, made numerous leases, dealt with repairs and whole house renovations when a few tenants nearly destroyed properties, and worked with property management companies on the HOA units.

So I'm familiar with managing rentals (even remotely, as I still helped during college) and am hoping to get a good cash flow rather than appreciation. I'm 24, currently have about $200k saved up, and have talked with a mortgage lender but not finalized getting pre-approved. I'm looking to invest out-of-state for my first real estate investments and was hoping for some guidance on where? I have family invested in Cleveland but the declining population and snowy conditions makes me hesitant (lived in CA all life, no idea what repairs snow damage needs?)  

**Another aspect is that I am worried about investing my cash (currently in 5% HYSA) into real estate and then the market declines as interest rates are cut.