Originally posted by @Jim K.:
Originally posted by @Ryan A.:
Originally posted by @Jaspreet Baveja:
@Ryan A. - I am in the East Bay (same city as you) and Kudos for your earnings, planning and goals! I would say REI is definitely something you should add to your portfolio! Now, whether you want to buy and hold in the Bay Area, Out of State (for actual cashflow), or house hack - totally up to you! However, if you want to be more passive in your approach, you should STRONGLY consider the Private Lending space. Especially if you are able to get a free consultation with a lawyer to review the documents, go through a reputable Title Company, vet the borrower and have fully drawn up document packages! This is what I do now and have had tremendous success over the past 2 to 3 years! There's also syndications (especially for an Accredited Investor) on CrowdStreet and such platforms as well. Let someone else do it with your money, and if you want to, jump into it yourself as well! Best of luck and feel free to reach out if you ever want to chat / meet (when the insanity ends)!
Hey neighbor! Private lending is interesting for sure. Never heard of it. Where did you start when getting into REI?
I found this property earlier today in Sacramento and got it to cash flow ~$800/month after all expenses and a 9% CoC return. Am I missing something on why people who live in the Bay Area are investing OOS so much?
If I were you I would sit down with my wife for a long talk, then move into the absolute cheapest one-bedroom apartment on a bus line that goes past your place of work that I could find. I would sell whatever I was driving and invest in a $5K Toyota or Honda gas-sipper as a family car and for your wife to drive to work. I would establish an initial annual budget of $30K above and beyond what I paid for rent and gas, with an aim of driving that down to $25K in two years. All my money would go into broad-based index funds through every tax-advantaged savings vehicle I could utilize or create. I would spend five years in that apartment, and in that time learn everything I could about personal finance and real estate in a subspecialty that I found interesting.
Five years later I would reassess with at least a million dollars put away for retirement and how to spend my money wisely for the benefit of my family fully figured out.
But I'm not you. I honestly suspect you don't really know why you want to do this. I think you vaguely believe that having more money will help you live better, be happier, solve many of your problems, add value to your life. Of and by itself, money will not do that. That's the ugly surprise waiting for a lot of wannabe wealthy people out there.
The wife and I are already doing your recommendations to an extent: 1.) We have done apartment living for years and are honestly just kind of over it so we decided to move into the far-East Bay Area to get more bang for our buck. Also, in the Bay Area, finding a 1bd1ba apartment that is safe, near BART, and not a piece of junk is going to run you a minimum of ~$2,500/month 2.) we have two cars worth less than $10k that are fully owned by us). 3.) Annually, outside of rent and gas, we spend about $2k/month.
We are currently in the process of saving for a downpayment on a home, so that will be our next biggest expense. I imagine this will take us about 2.5-3 years at the minimum. This is also assuming we want to pu 20% down on something worth $1M+.
Sure, to an extent, I believe money will solve/prevent some issues in the future should we face them (look at the world right now). However, the reason I'm considering real estate is that I enjoy spending time doing this stuff (I'm a numbers guy) and a good chunk of my other form of investing (401k's) won't be available until I'm 59.5, so I'd like to have some sort of cash flow before then outside of my W2 job.
