All Forum Posts by: Saeed J.

Hi Saeed. Without knowing anything about your financial situation or what price ranges you're looking at, if you don't already own a primary residence in the Bay Area, I would house hack. If you're paying high rent here (e.g $2500 to $4000+ a month), I think it makes no sense to buy out of state and continue to pay high rent (unless you live with family or have some other type of very low rent situation). If you can buy within a 2 hour drive (maybe Sacramento area, which is what I'm considering), you have a lot more control as far as checking on the property than buying OOS. 

Since you have relatives in Houston, they could help keep an eye on the property and assuming you would visit there, that might be a possibility. With the properties in Cincinnati, did you visit in person? 

I invest in the Bay Area and Indianapolis. With 7% interest rates, it's difficult to cash flow in anywhere unless you go the STR or MTR route. Wealth in real estate is built on appreciation. I have long term rentals in Indianapolis and my cash flow is declining with increasing property taxes, 17% with the last assessment, but I'm keeping my Class A (nice suburb with great schools) because of appreciation (owned 11 years now). I bought Class C in Indy in 2023 and now my cash flow is non-existent from repairs called in by tenant (7 times in 9 months), capital expenses (stolen AC unit before tenant moved in). I lived in the Indy area so and now I know there areas down to more of a detailed level.

My suggestions: 

- don't buy in unknown markets despite whatever numbers someone is showing you or that it will cash flow X amount of dollars. 

- Do your own research (including finding out about property taxes and insurance) and talk to lots of people including property management companies - they know what rents are in different neighborhoods, tenant base, etc. Talk to contractors to get a sense of what renovations and repairs cost 

- Fly or drive to the area and get to know it really well. Network with local investors (someone unbiased, not an agent or anyone trying to sell you anything)

- pick a solid appreciating area (Class A or B) with good (or at least decent) schools. if you drive around the neighborhood, would you want to live there or would you feel safe walking around at night?  I wouldn't do Class C if I had to do things differently. 

- have lots of cash reserves. A house can pass inspection but once someone is living there it's being put under daily stress (faucets turned on/off, heat/AC on an off, etc) so be prepared for repair costs 

Most markets have potential but it all depends on your strategy. Having relatives in the Houston area who potentially could help with small would be a positive asset. Also having the local market knowledge of areas that are up and coming, where to stay away from, and any other improvements is helpful. If you visit annually or even every couple years it gives you a reason to check in on the properties. Investing in a city or state you haven't visited and and do not have extensive knowledge on can add unforeseen variables that make a deal not pencil or too much of a headache. 

Which ever market you choose will depend on your strategy and how involved you are going to be. Having someone you know in the area that you can trust is a good head start.