All Forum Posts by: Raju Balakrishnan

 Did you close this? how is it going?

I work with Michelle Sun, Harrison accounting Freemont. So far working well for me. She is knowledgable about RE, these topics she may be able to help. 

 Hi John,  What are the mentorship groups? Can you give some exaples or pointes?

It is all about numbers. Eviction time etc is another cost, and goes into your numbers. Keeping it purely as a financial discussion, not political one, all that matters is more specific questions like rent control, building regulations, rate of appreciation, population increase etc. Red or blue does not matter, though that may be a driver of some of these numbers. But we need not bother once they factor that as numbers into our calculations.  

If we use the linear thinking and try to see how I will replace w2 with real-estate income it is very hard to make sense. RE like most other investments almost always makes wealth on compounding (directly or indirectly). For such wealth building, your strategy is more important than how much you make from each investment on day 1. So having a proper scalable strategy, getting your numbers correct, and ability to stick to it in spite of short term pain is what makes you wealthy over 10-15 years. If you analyze any of the common strategies like BRRR, or sell and buy larger etc they have compounding as the corner stone. More important than appreciation, managing risk is more important especially when you start out. As Warren Buffet says, no one wants to get rich slowly, but that is the most common kind of wealth building.

I did furnished rental in South bay for a short time. For the traveling nurses, the primary factor is reduced cost. If they can get 1/1 apartment in the price they will prefer that instead of house sharig as Bonnie Low correctly pointed out. It is true that they do not travel as groups in general, and would have to be ready for individual renters moving in and out at different times. 

While everyone prefers  having their own bed and bat, making financial sense for 1/1 individual space in bay area is hard. For example if you have a 2/1 house which can rent at 3200 otherwise, and travel nurse are willing to pay 1800 you are still making only a little over long term rental. With furnishing and vacancies this may not make sense. This math will get better as you will have more beds in the house. 

So if you look at furnished finder etc to find travel nurse rents, and look at area long term rental rates for the area you are considering you will get an idea of what will work financially. 

It may be a good time to buy in California. Bay area, and California market came down as the interest rates hiked. Now most of the South bay and East area is in an upward trend in prices. Many of the surrounding areas are in uptrend also. Further the people leaving bay area has stabilized. The tech Stocks are appreciating. These are good signs for real estate here. Tech layoffs are a threat, but if Fed reduce interest rates that will give a further boost to the market in 2024. Several popular out-of-state markets like midwest might see reduced interest as interest rate go down.They  did not see a price decline in 2023 as investors flocked to markets with high caps as interest rate went up (e.g. Cleveland).  

Well we have got a number of rejections and some really high quotes. But its also true that CA is in a bad spot (more than other states) with insurance, as number of commercial insurance providers pulled out (e.g. Berkshire Hathaway discontinued my policy this year). Still if you are holding in bay are or so called "big cities" it is fine as I get good quotes for them. Still in the process of trying some other providers and California fair plan with the broker. 

I am having a hard time for finding insurance for an 11 unit  apartment building in California. The area is not high  fire risk and in a large downtown. Is a low income area, and building is not in great condition, but 90% occupied. It is a deep value add deal.  

Trying for California Fair plan now.  Any other suggestions?

I focus on both CA and out of state market and is a full time investor/manager. California has several opportunities now. I see good opportunities to get a good returns as investment is slow on the state now due to several reasons. I focus on commercials, but that is true in SFR flips etc too as I hear from my friends. Since you said passive, I assume you are looking for buy and hold, almost turnkey. If you look at California markets, most them had good appreciation from 2011 onwards. In my analysis, overall rate appreciation in all these markets were very similar to that of San Jose and south bay. So you may be good to invest in any of these markets. You may picking one based on you capital availability any any other affinities. For example, I like Stockton, since it has good potential and is relatively close to bay area (home). There are few other markets also even more cheaper but has been appreciating steadily.