All Forum Posts by: Raju Balakrishnan

One fast way to generate cash flow is to invest in high cash flow, low appreciation markets (say several midwest e.g. Cleveland/Detroit). But need to handle the risk of remote investing, and lackluster appreciation. Low appreciation may make the RoI from these assets low over long term, though they will cash flow on day 1. But since you will be able to finance with LTVs, potentially higher leverage may be used and can scale the portfolio faster with the right strategy. 

I agree that 20k cost estimate is low. Rent controls will be a real issue if you are planning it as a rental investment which in fact reduce the value of the main house as a rental. Secondly, if the appraised value is less than replacement cost, ADU does not make sense for a value add. If you do not have data/comps to find out your post renovation value, that ads a huge risk, and makes the move less valuable.

This one will be interesting, in mountain view and it is very active. https://www.meetup.com/San-Jose-Real-Estate-Networking-Club/... Mostly house flipping community, but will be  relevant to others. Meetings are generally on third Thursday of the month at Aloft Mountain View. 

Rent out room by room to MTR. Management can be hard, but I had good demand from travel nurses for budget room rentals when I had a furnished rental in San Jose. I haven't tried room by room rental. Trick is to keep the per room rent slightly cheaper than a studio apartment rents.  There is some great material on the business mode for bay area that in Biggerpocket. 

There are, but RE is a business. I am a property owner, and got good advice on several topics here. But as I got more experienced I learn less and less from most forum posts are you know most basics already. You need more advanced avenues.  That is natural lifecycle of any learning, as you move from elementary to high school, to college. 

Its not bad if you can afford it. There are plenty of investors in bay area who got rich by holding negative cash flow properties over long time. So if you ave sufficient income to hold the properties and goal is long term wealth building, you are likely to be good. I don't like brand new properties, since the first few years depreciation can be steep, similar to a new car. But they give you zero maintenance for a few years. Besides, new build communities could be risky unless it is in a proven area. 

Some lenders looks at age of the company and revenue (e.g. business line of credits) hence single LLC may be easier. But that can be circumvented by having a holding company.

The right solution will vary for person to person. In some states you can have cheaper LLCs. CA has $800 LLC fees, and you will have additional expenses of tax filing etc. So you may be better off with less number of LLCs. Also your risk profile and total net assents in each LLC matters too.

Bay area is for buy and holds. If you have other income to support and has capital, you will get rich slowly with appreciation. I like Stockton, as the prices are low but appreciation is bad. But it is a harder market than bay area as finding good tenants and right areas to invest for your criteria takes more work. 

If you think bay area, you should think of (potential) appreciation. Conventional renting out never makes sense here in terms of cash flow. Strategies like furnished mid-term rentals, renting by rooms, mid-term/short term rentals or creative mixes of these can be considered too. Needs more effort but you will get better rents on right locations. There are people who do that successfully. Whatever be the strategy, if you can hold in bay area for long term without money from your pocket, you are likely to end up being wealthy. 

Overall good list. In a high level, the appreciation is inversely proportional to price to rent ratios. So you would have to compromise on one for other. Overall CA cities have higher appreciation than national averages. Lower priced markets in central valley have better rent/price but lower appreciation compared to bay area.