All Forum Posts by: Nicholas Baughman

@Dan H. I agree with you. That's why it's important to find positive cash flow on a rental to withstand a downturn. I'll buy and hold the property as long as I can or use it to find upgrades. To be honest, I'm a little scared and need to just pull the trigger. My wife is worried if things go wrong we'd lose our primary we've worked so hard on. I try to reassure that's not going to happen (it would be an extremely worse case scenario). I need her to start educating herself on real estate so she can have the knowledge I've been working hard to obtain. I bought her Rich Mom. Poor Mom for Mother's Day hoping that might add some insight. LOL 

@Nick Kravchuk I've considered that too but I'm not sure I'd get the 25% I need down. Then the con is if I do I'd, like you said, would need to basically refi or flip the property to pay off the HELOC before rates would increase. It's kind of hard finding a multi family that would appreciate that much too.

@Alex Deacon I agree with you wholeheartedly. LOL Thanks for your input. 

My wife and I bought a home in Clairemont (San Diego) back in 2011 for $330,000. Now it's probably worth close to $550-600k. I'm trying to get my foot in the door to invest in real estate. The option I have now is pulling equity out and finding a multi family unit somewhere south of the 8 (where it's more affordable). My problem is convincing my wife that using the cash out refi towards an investment property rather than remodeling the kitchen would be a better thing to do. I currently have a 30 year fixed VA loan at 2.75%. If I pull the cash out 100-125k it will increase our mortgage ~$600 more a month and the rate I'd be at is 3.75% (depending when I lock it in). Now the broker I'm working with says I could always buy it down to 3.5 or even 3%. I think I agree with him on this. The problem though is now I need at least 25% down on an multifamily (which would eat the cash out) plus finding a property that has renters who are paying enough rent to compensate for the increase at my primary. I feel it's best to get started investing in my backyard first and become more familiar with all the processes. However, San Diego, as I'm sure you know, is a tough market. Should I just forget about starting here and look elsewhere? Do you have any advice on trying to get started here? Is my plan flawed? Should I pull equity out now and sit on it? If I pull equity out now before the market softens Ill get more at lower interest rates but if I wait until it turns downward then I risk a higher interest rate and less equity. If I pull it out now and wait then I will eat it until I think the timing is right and don't think that's a good idea. I apologize for the long-winded message. I'm just trying to find some answers and to get in the game. Thank you for your time.

Perhaps these same people are only listening to half of the podcasts, if any at all. I can see where they could come up with an idea like that but if you listen longer, or to other podcasts, it is made clear that, let's say the 70% rule, doesn't always work in every market. If you live in a market like I do, San Diego, you'll also find out that the 2% rule doesn't work that well either. That being said, it has been made clear that these are just "rules of thumb". I think the people you are working with aren't getting, or listening, to all the info. Because of that, they probably won't do well. That's my opinion. With that, I don't feel BP is giving unrealistic expectations at all. I think people are picking and choosing their info and not doing their due diligence.

@Fabio Salas, @JB Cunningham, and @David Faulkner, thank you for the information and great advice. SD is such a competitive market. I've mentioned to my partner about investing out of town but if we can't see it in person it becomes a risk we're not willing to take. Phoenix could be an option. I'll definitely consider that. As far as wholesaling, does any one have any great links or advice on how to get started in that?  What about Tax Deed sales? Does anyone have any experience in that? I've been researching that route too but can't really afford to hold on to a property for a year without making money on it. Also, I'm looking once to multi-unit properties in the area. Is that a good idea? Thanks. 

@John D. If you dont mind me asking; What's your strategy to find motivated sellers? I've hear the yellow card technique. Does that work in SD? 

@Andrew Johnson: You have a great point! I was just discussing that with a coworker a few hours ago. Why wait until the market drops, pay higher interest rates, and get less on your property? 

@Fyzl Atmar: That's great advice too. I know a lot of people that live in those areas. One thing I need my partner (wife) to overcome is the location aspect. She believes in buying property in areas we'd want to live. She's also afraid of buying out of state. I'm trying to get her to realize it's not always about the location but what the numbers are at the end of the day (there's more to it than just that, I know). But those areas may be easier for Us to BRRRR and get started.

I thank you all for you taking the time to respond to my post. I greatly appreciate all the info I can get. 

Hello Everybody, My name is Nick and I am an extremely new to REI. I live in San Diego and I am looking to start investing. I've been trying to write up my business plan but I'm stuck on my mission statement. There are so many ways to get started that I can't narrow my ideas down to just one specific niche. Part of the problem is that I don't have a huge bank roll to get started. I have equity in my current home but my partner is scared to pull it out and BRRRR our next property. She works in the mortgage industry and they predict the market will drop 20%. They have started layoffs too (kind of a random statement but it goes along with which direction would be best). That being said, I have a few ideas about where I should start (BRRRR, wholesale, Tax Deeds, flips) but I'm not sure what is the best way for new investors in the San Diego market. Any thoughts?

That's great advice! Thank you all. 

Excuse me for me naïveté. It's been a long time since I've taken real estate courses. I'm also just getting started on the investment side. I've been researching as much as possible before making the jump. I don't recall on how to calculate the rent multiplier. The house is off market. It is all one unit but separated from downstairs and upstairs, and some studio looking thing in the garage. I believe the comps in the area are around $675k. The owners are using it more like a bnb or airbnb. The monthly rent for the entire thing is around $5k. It's possible the top is $3500 and the bottom is $1500/m. I thought it was on the market but I got it confused with another place. The log book looks like the last visitors were in November. So they may not be renting it out as much as they like. If this was a promising deal, would I contact the owners and see if they'd be willing to sell? What's the best option for assignment in this situation? How would you go about contacting the And saying, "hey, do you want to sell this place?"