All Forum Posts by: Raju Balakrishnan

Set your goal say 5, 10 and 20 years from now and work backwards from there to decide what to do with the money. It sounds like a long time, but RE is a long term game. Decide what you want to learn, and invest the money/part of it to find a good deal in that asset class. Think in long term, but act in short term (or soon). 

Hi Derek, I am primarily a full time RE investor and entrepreneur in bay area holding 22 units in an around bay area, would be glad to connect. 

Depending on how you want to balance between fast growth vs risk. I would say work backwards from your goals and see which will take you closer to the goal. RE risk increases with leverage, but without leverage you may as well invest in stocks with lower interest and higher returns. Right balance depends on the specific goals and risk profile of the investor. 

Your cash on cash and cash on equity will be low in CA, more so in bay area or LA. But Your return on investment considering appreciation has been great historically. And this has been very steady tier 1 markets. So you need to choose. For example to invest a million, you can buy one house with 250k down payment, 2-3 years later you can double your investment as house appreciate to 1.2MM. rents will be low, and you will loose 30-40k on interests net of rents. Still you will make 160k net in 3 years. But you should already have money to get in. 

Spend some time to understand compounding and its implication on wealth building. Then some time on understanding risk and how to manage potential downside vs expected upside. Several books like "Am I being too subtle" will help to understand risk-reward. Along with you will realize the most valuable resource you have than most others, which is time! Congratulation on your great start!

Super elaborate and  very useful, Thanks a lot!

 Not really easy to verify how accurate the data is. They do some predictions to distinguish between actual occupancies vs host blocking calendar etc. Hence I expect it to be inexact. But still  the best data available publicly. If we combine AirDNA data with eyeballing  airbnb/VRBO listings and occupancies in the area we should be able to get an idea.

It may be hard to cash flow directly even by house-hacking. But you will be saving money when you add your cost of rent also. Consider fourplexes instead of duplexes if you can afford for better cashflow. In bay area, if you can buy anything most likely appreciation and time will do its magic over years (i.e. 7.2% average appreciation over last 25 years). 

I had success with STRs in San Jose some years back, but later stopped due to time constraints. I think best way to go is choose some areas of interest and verify STR restrictions. Then you may subscribe to AirDNA to understand the market data to see if it meets your expectations.

Private money lenders like RCN Capital, Conventus etc provides non-recourse bridges nationwide. May work depending on the asset class. Another option may be a business line of credit since you have an established business already.  Even Fannie and Freddie has non-recourse bridges but generally look for experience, but comes at lower rates.