All Forum Posts by: Varun M.

This thread opened our eyes to so many options other than selling our SFR, that we just hadn't considered. Heartfelt thanks to you all. Selling the existing SFR sounds like a pretty sub-optimal idea now :)

@Austin Largusa investing out of state is absolutely on the table! In fact, we are looking into investing out of state as well albeit we weren't exploring the possibility of taking equity out of our current home to pay for it (my ignorance). I started this thread assuming we would have to sell our house to use the equity, but given the generous advice on this thread, it's pretty clear that HELOC / HEL might be the way to go, which in turn means we don't need to sell our current home to use the equity, and thus opens us wide to using that equity to fund our investments anywhere, not just bay area (sorry for the long run on sentence).

@Stephen G. a mentor like you is what I need :) But seriously, unless I am missing a nuance, our goals sound quite similar. Looking to retire by 40 (both of us are 32 now). Which means two things for us by then: 

(1) build towards "enough" passive income (~10k / mo after taxes)

(2) reach net worth ~$10m - including debt pay down across all assets - stocks + RE

Honestly, hadn't though past that, but your plan beyond 50 sounds like a pretty solid strategy to strive for. So thanks so much for sharing that. One question for you if you don't mind - for your appreciation goal, were there factors you considered to decide whether to invest in the Bay Area vs. outside? Asking as I am in that situation right now, but I am probably evaluating that with a somewhat narrow lens of "where will I get most appreciation?" Happy to take this on the DM as well. 

@Amit M. thanks for sharing the tip! Will look into it.

@Stephen G. great suggestion. thank you! On second thoughts, the expected rents I mentioned do seem high. I'll try the craigslist test before we make a move - sounds promising to get a pulse on rental income in any market! Thanks for sharing.

@Paul Merriwether thanks for sharing your thoughts. The appreciation question for a SFH vs. MFH was playing on my mind as well. Thanks for clarifying that for me! I'll be sure to look into the future value calculator.

And thanks for sharing the plan! I'll spend some time studying it to see how / what we can make happen. The maneuver of getting additional properties without selling our current SFH is very compelling to me!

@Brian Garlington thanks, and great question. We are reluctant to rent rooms due to lack of privacy. We figured going the multi-family route would give us the benefit of having tenants (and the rental income) without compromising on the privacy, as much.

@Stephen G. thank you! You hit a ton of great points - really appreciate it. 

Why are we ruling out East bay / Oakland? My wife works in the south bay and I work in the city. We'll both likely need to go back into office next year. Plus, we have been in the city for ~5 years and like it here.

What are our numbers? Actually, you were pretty close with your estimates :) We are looking to get ~$2 - $2.2m for our current house, and that would put us at ~800k - 1m in equity (after sales costs). If we put that towards the down-payment, that would present two scenarios. 

(1) buy a duplex up to $2.5m  - assuming we rent out one unit for ~$4500 / mo / unit.

(2) buy a triplex up to $3.2m - assume we rent out two units for ~$4500 / mo / unit. 

In both scenarios, our monthly outflow towards mortgage will be similar to what we're paying today for our SFR.

So yes, pretty similar to what you called out in your post. Thanks for sharing the example. I know my wife is quite open to moving to peninsula / south bay, so she would appreciate it! :) 

Hello Bay Area house hackers, 

Hope you're doing well. My wife and I currently own a SFH in Sunset, San Francisco. We've been reading up on house hacking and have been considering selling our SFH and buy a duplex / triplex in SF Bay Area so we could live in one, and rent the other unit(s). Typical house hacking stuff. Weather is another consideration for us. As much as we like our home and the Sunset, we wouldn't mind moving to a neighborhood that gets a bit more sun. We would prefer staying in SF, but open to considering other neighborhoods in the peninsula south of Palo Alto. Not considering East Bay at the moment.

On the financial side, we have two goals:

(1) build more equity, faster

(2) not increase our monthly mortgage from what we currently pay (in other words, we are fine paying what we currently pay for our SFH, as long as the rental income covers the incremental mortgage)

I would love to chat with you if you have been through a similar journey, or have thoughts on what to consider in making such a move. A few things we are looking to get insight on:

(1) what do you typically give up moving from a SFH to multi-family? And while I understand it's different for everyone, what mattered most to you if you've done it? Full transparency, my wife is concerned we're going to be "downgrading" substantially.

(2) any thoughts on what are some of the areas outside SF which lend themselves nicely to what we are trying to accomplish?

(3) if we were to pull the trigger on this, we would likely want to do a Section 121 to preserve our equity gains, as much as possible, and pour it back towards the downpayment of the multi-family. Are there other financial considerations we should take into account in doing so? I know the right answer here is to talk to a CPA but looking for someone's perspective who has been through it. 

(4) any other considerations we might be overlooking?

Would appreciate any inputs!

Thanks,

Varun

Thanks, James. I understand I will likely not be able to get any of the GCs to talk to me until I buy a property in the area, completely reasonable. Wasn't planning on approaching them until I close on a property anyway.

My challenge at this point is even knowing which GCs to call once I buy the property, since I don't have their contacts, to begin with :) I am an out-of-state investor which makes it more challenging. I was hoping to get some leads here. 

Thanks for the insight @James Wise. Assuming I had a property under my belt and I was looking for work, would that improve my chances of getting connected to GCs? If so, how. Not challenging, just looking to educate myself. 

Hi BiggerPockets community - 

First off, just wanted to say a big thank you to all you wonderful people. You all are helping investors like myself who are just getting started to never lose hope and keep going. So from the bottom of my heart - thank you. 

My wife and I are starting out our investment journey in Ohio. We have identified two areas - Columbus and Cleveland - that we're currently exploring. I am going to refrain from asking which city to invest in, since there are plenty of useful threads / blogs on this topic. We are looking in both areas, analyzing properties and keeping an open mind to see what meets our goals.

We are in the process of building out partnerships and key connections. We have found the agent we want to work with. We will be interviewing PMs that we have found (again, thanks to the BP community) over the next couple of days.

Not surprisingly, we have zero leads on reliable, honest and licensed GCs. We are not looking to do a total rehab for our first buy, but will be searching for deals, and it's likely the one we go for will need a cosmetic rehab. So trying to stay ahead of the curve, and getting connected.

Based on what I've read, a lot of people, generally speaking, are reluctant to share referrals to good GCs, and I understand why, but if you don't mind sharing, I would sincerely appreciate the gesture. If not, I understand that too. Seeking referrals both in Cleveland and Columbus. 

I can't promise much in return right now, but I promise to pay it forward some day. 

Thank you once again. 

Varun