All Forum Posts by: Sergio Rodriguez

@Meidelyne B. What a cool idea. Almost like testing out the classes before taking them. 

I try to look into every house that comes up on the RedFin App, though its mostly virtual and 50% rule, 70% rule, or 2% rule analysis. 

How thorough is your desktop analysis? I have trouble trusting my results since my not sure how to approach finding the ARV, insurance costs, taxes, and the things specific to my area. My county's assessors doesn't seem to have any way to find information either. Even though my numbers are practice for now, I still would like to include as much information as possible.

If the numbers are good, the property meets your criteria, and your criteria meets your market, I'm sure you will meet your goal! 

-Sergio Rodriguez

Hello Everyone

@Jeff Keller Thanks for the clarification of the MLS as the different websites can cause confusion as to which is accurate and most helpful. The explanation of the network of associations in my area also helped in my understanding. Thanks.

@Rolanda Eldridge I definitely will keep an open mind! I still have a lot of foundation building to do and cant wait to take my RE Investing to the next level! Thanks for your support and story. Good Luck Too! 

@Maria Diegelman I am eager to get started and am trying to find a road into the industry that may suit me the most or are have the best possibilities in my area. What you point out makes sense, it seems being an Agent and an Investor must be separate businesses and dividing my time between the two may cause problems with success in both. I need to get networking, that's for sure. I have also thought of your suggestion and am trying to work on analyzing deals and practicing the numbers. Tempted to get a pro account just for the calculators haha. Thanks for your time, suggestions, and perspective. 

@Steve Milford Your enthusiasm is contagious! I have the same mentality of wanting to get my feet wet and stating gaining experience as that is where the real education is. I will definitely take your post into consideration as your story, perseverance, and goal setting is highly motivational. Thank you. I may message you in the future if any questions pop into my mind

From all these responses, I must take some more time to think whether I am able to achieve my initial goal of a significant increase of income through becoming an Agent. 

Thanks Again

Sergio Rodriguez

Jeff Keller Thanks for the reply. What if I just wanted to gain more income and didn't invest for the time being? I'll look more seriously into those websites. I believed them to be inaccurate or similar to Zillow and Trulia where the information is decent but not analysis worthy. What about Redfin?

Mark Nolan Will do! Just trying to wade through all the available information is amazingly time consuming. James Wise Thanks! Hope to set sail sooner rather than later.

Hello Everyone.

I missed the New Introductions when I started posting green questions. So I want to come back and start here.

I currently am a part time employee at a Dry Cleaners and an Uber Driver in the Northern Peninsula. I hope to run my Uber Driving as a business when it comes to managing profits and finances in order to earn maximum profits to contribute to my cash reserves. I have worked at the Dry Cleaners for almost 5 years as its was my first Job out of high school and an easy one, but the potential for a substantial increase in income is nill due to the limited hours and potential for the business to expand.

I was taking classes at College of San Mateo to pursue a degree in Physics, however, due to financial aid issues and my difficulty with Calculus, that has been put on hold. In order to supplement my education, I started watching Youtube Videos on Investing topics such as: finances, stocks, precious metals, commodities, Rich Dad Poor Dad, building wealth. Then I listened to The Creature From Jekyll Island by G. Edward Griffin on audible and what I took from that book was simple: Investing is critical to a secure future. This continued my interest and a few more videos on Youtube led me to BiggerPockets and Real Estate Investing. 

I have already learned so much from The Ultimate Beginners Guide to Real Estate Investing, BP Podcast ep: 1-32 (need to catch up), The Real Estate Rewind and reading through any forum that catches my keywords. 

Like many, I have an eagerness to get started and am currently looking for ways to get into the industry that result in both a gain in current income and education through experience. 

My desired niche is either multi-families and small apartment buildings, with the hope to house-hack then buy and hold for long term positive cash flow and wealth generation. A positive cash flow high enough after expenses to be able to absorb any unforeseen issues is desired, but any cash flow is good cash flow. 

My current goal is to gain a raise in income to generate cash reserves as a starting safety net, then invest With Low or No Money Down in the above niche. 

Thanks For Reading,

Sergio Rodriguez

Hello again @Chris Mason,

No, I have not closed any deals ever. That is why I was asking if it was a decent way to get into the industry.

While I need to acquire more cash reserves and general savings through an increase in my main income, I was thinking of becoming Licensed to gain any experience possible.

I do not have a means to raise the amount of income I am currently receiving without leaving my current stable part-time job to pursue something else. An increase in hours is not an available option either.

I suppose you are saying "No, don't get it. You don't have the need or experience to use the License effectively."

While I do not have any inclination that becoming generally successful as an REA is easy, it seems like a decent way to both acquire the capital I need through possible commissions and gain experience. I can read all the books and forum posts I want, but experiencing the actions, ebbs, flows, and nuances in the winds of Real Estate investing is where the wisdom behind the knowledge and concepts resides. 

I have read a few of the thousands of posts you have replied to and really appreciate your time. 

Thanks, 

Sergio Rodriguez  

Hello BP Forum,

I am very new and exploring options to gain education and experience from within the industry. One option most ponder over is becoming a Real Estate Agent in the desired market area and is even advocated for in the BP Podcast.

The main reason a License is beneficial seems to be due to the ability to be your own buyers agent and save on some closing costs as well as a foundation on which to understand the paperwork and processes of a standard transaction. 

The other reasons a License is beneficial is the obvious access to the MLS and maybe a quicker ability to gain other confidence when starting to network.

I am in the Bay Area of CA.

Are my assumptions of the benefits of a REA License for an investor even applicable? I have heard that the MLS tends to be a desert with ever drying oases of deals.

Is becoming a REA a viable option to getting started?

What, if any, are the stipulations to using your REA License for your own investments?

Can I operate as my own buying and selling agent without a Broker? By "my own," I mean I am my own Client.

Is operating as an REA in the Bay Area an effective way to generate starting capital with which to invest?

If I am not taking certain facts of operating as an REA into consideration please let me know why and how they may effect my investing goals.

These are very green questions, so thank you for your time.

Sergio Rodriguez

@Chris Mason

In my understanding you described two(2) extremes of Market Conditions in terms of percentage of financing compared to purchase prices.

1) The "FHA Market" - or Low Down Payment Market?

-Majority of FTHB will use an FHA Loan (3.5% Down), therefore purchase prices are ~96.5% of loan amounts and only lenders can afford to "purchase" homes (~96.5% of price).

-"Strategic Default" tends to cause a depression in home values, therefore markets of lower appreciation, but higher cashflow due to low money down.

-A conventional down payment of 25% in this market can be equal to that of a cash offer and could lead to a discounted purchase price.

2) The High Down Payment Market -Name?

-Majority of FTHB or HB will put up a high down payment or all cash offer, therefore purchase prices are not the same (~96.5%) as loan amounts and lenders are not "purchasing" homes.

"Strategic Default" is not a factor nor implemented due to the high amount of initial equity of the buyer, therefore the market has higher appreciation, but lower cashflow short term due to higher money down. Cashflow may increase in future either when the loan is paid off or higher appreciation leads to higher rent.

-Real Estate Agents accept only a certain, higher down payment of X%; where X is subject to the experience and success of the Agent, therefore offers that fit this criteria are accepted.

If I understood correctly, then my initial logic of a high amount of cash offers driving purchase prices up through competition and causing a Bay Area Bubble Burst is flawed due to the ability of buyers to not go into "Strategic Default" through a higher down payment or even an all cash offer. Since the majority of offers are cash offers, it is appropriate to suggest that majority of buyers are financially stable and can afford the property they purchased and will not go into default therefore not causing a depression in home values and not Bursting the Bubble.

The context of these two extreme markets, if I understood correctly, can now help me frame the analysis of the Bay Area Markets and choose as strategy that is appropriate for my market of choice. 

Thanks for your Time and Response,

Sergio Rodriguez

I have absolutely no experience. Seriously none.

It seems you may have a lack of understanding of the exact scope of your project. Taking the time to determine and understand where you spent each dollar, where each expense came from, and how you decided to proceed with each expense may help clarify what exactly your position is. Sit down, find all transactions with respect to the project, organize them, and determine what actions or lack thereof caused your current predicament. Take notes as these can be lessons for the future. Make sure to be concise and clear in your observations and organization.

The analysis and understanding of your current financial standing is the foundation for this decision. From there you can run numbers in a deliberate manner to see which options are open to you. What you may find can surprise you or can be discouraging, however, it is imperative that a logical, calm, and deliberate path is laid out that is agile in nature in order to minimize or maximize losses or gains respectively. 

We cannot decide for you on how to proceed as understanding the true scope of the situation is only available to those whom are directly involved.

Thanks for Reading

Sergio Rodriguez

Hello Bigger Pockets Forums,

As a VERY new and want-to-be REI in the Bay Area, I am considerably overwhelmed with the amount of "micro-markets" that exist. East Bay, South Bay, Peninsula, or even by county; the amount of possible areas to research and gain a fundamental understanding of is seemingly immense.

Through this post and discussion, I hope to gain even the slightest foundation on which to build this understanding. A general overview, personal anecdotes and experiences, or even a simple "go here and read this" is greatly appreciated.

I understand that the overall Bay Area market is highly competitive with an abundance of all cash offers driving prices higher than "normal." Speculation Question: Does this indicate an ever-weakening surface tension of the Bay Area bubble? Wondering whether I can even compete in this market is a main concern as my cash reserves are nearly non-existent and my knowledge of navigating the creative means of financing are conceptual at best. Obviously I need to acquire a significant amount of cash reserves in order to cover my own a$$, however, obtaining creative financing seems to require networking and establishing a reputation in this industry. 

Networking tends to be the end-all be-all answer to many questions about starting out in this industry. @Brandon Turner and BP videos, podcasts, and resources all equate success with a positive outlook on networking and taking the steps to do so is crucial to those whom succeed. While going to the local REI meet-ups and contacting REA or Brokers seems to be the ultimate answers to "How do I start networking?", taking an actionable step towards this requires confidence in oneself with regards to understanding at least the vocabulary of the industry. How has networking helped or hurt in the Bay Area Market? What is the prevailing attitude towards newer investors "trying to find a mentor?" What mindset and skills are desired in this Market in order to network efficiently and benefit all parties involved?

Frequently I dive in head first when finding a new interesting subject, willing to let the winds of chance fill the sails of my rickety boat built from twigs and driftwood of information I find. Always wanting to set sail as quickly as possible with a map to success drawn in haste, this vessel I build with each interested subject is never seaworthy, having a leaky hull and torn sails where vital information is missing. How does one know when their vessel is seaworthy? How does a Captain choose whether to sail through the storm and beat the competition or stay in Port and gather more information and supplies? Actions must be taken in order to succeed, but can be detrimental when taken with little information. In the ever changing Sea of REI, what allows the Captains to see the change in the winds and take actions accordingly? A trusted crew? A strong vessel? An observant eye? Do Captains set sail in vessels such as mine with maps such as mine and manage to repair and navigate these treacherous conditions while at sea? Or do these Captains go down with their vessel, a victim of overconfidence and unpreparedness?

Thanks for your time and response,

Sergio Rodriguez