All Forum Posts by: Vincent Van

@David Faulkner

Thanks David. I really appreciate your inputs. I'm gonna put my thoughts into this whole out-of-state thing. Of course I would prefer doing it local if possible, it's just that I have not found local markets near where I live that met my requirements yet.

@David Faulkner

I just looked a bit into "force appreciation", and seem like it does require a bit of active involvement and hand-on to upgrade the props, which I would try to avoid doing at this time. I also understand about long-term historic higher appreciation rate in coastal markets vs midwest. Since I'm totally new and don't have much knowledge in REI, I would like to minimize the risk as much as possible, even that means a bit lower return in future. Of course my investment objectives and strategy could be change as I gain more knowledge. I'm not really a big risk taker, and at this time, preserve my capital is one of my top priority by playing it safe. For example, a $200k SFR in Riverside couple years ago, now worth $300k. If I bought at that time, I could have gained double my down payment if I sell now. Let say if I purchase it now (no cash-flow), it may go up another 30% in couple years, or it could go down the same rate (ie: wipe out my down payment).. forcing me to stick with the none cash-flow props till the trend turn back up. I don't know nor have enough knowledge to forecast the trend to time the market to catch the up wave. However with a cash-flow props, I know (or at least hope) that most likely it would continue to produce cash-flow on my capitals even in down trend. Regardless, thank you for your input, and hints. I do understand what you said, I just need more time, polish my swords and weapons so I can pull the trigger on bigger deals. I'm definitely would look more into local markets, and learn as much as I can to gain more knowledge so that deals become an investment instead of just speculation.

As for investing out of state, one other major thing I need to know is the tax implication, advantage / disadvantage, would I be double-taxed for rental income in rental's state, plus CA etc..? Would this varies depending on state that I invest in etc..

@Ali Boone I PMed you request for turnkey company names. Thanks!

I'm open to all ideas and input, the more I know and understand, the better decision would be.

@Tyler Herman

Thanks! I never really been anywhere else in US except west coastal LA/OC area. So far I have heard about Indianapolis, Kansas City, and Memphis... Not really sure there are other areas / market that I can look into.

@David Dye , @Sydney Hall , @Carlos Altamirano , and @David Faulkner

Thanks for your advises. The main reason I try to avoid California (especially my local) is the price just too high, I tried to plug in numbers many times, and it just seems not right. There just barely any cash-flow. If I was to bet on appreciation alone, it would seem a bit risky here, yah I may hit a jackpot, but rely on luck is a bad strategy (in my opinion) - since I don't have experience in RE, I would like to minimize my risk, and do investment instead of speculation.

Maybe I didn't look at enough in California, or just don't really know where and how to look for area that cash-flow (Fresno, Bakerfield?), and meet my requirements. It would be wonderful if you guys can provide me some pointers.

Hi all,

I live in Los Angeles / Orange county, California. I have reserved some cash to deep my toe in REI, and if things work out great, I can allocate more cash into this biz to scale up.

Since I'm new to this, so I'm gonna have some reasonable goals so they are achievable :-)

1) Goals:

My long term goal (10 years+) is to have enough passive income from rentals (or anything related to RE) so that we can have financial freedom.

Intermedia term goal (in 5 years) would be to have $5k+ monthly income from RE in

Short term goal is to have roughly $1k monthly passive income by end of 2017

2) How can I get to my short term goal?

Follow the 50% rule, to have $1,000 income, I would need to collect at least $2000 in monthly rent. Here are few ways I thought of:

a) Purchase 3 properties in mid-west, about $70~90k each would produce maybe $600-800 / month rent.

b) Purchase 2 properties somewhere (I don't know), preperable in A, or B class neighborhood, each cost $100~$125k, and can produce $1000+ / month rent.

c) Purchase a property near my cousin's backyard, which may cost $400k+ and can get $2000 / month rent. The cash-flow (if any) here is just too low, plus I've already own my primary resident (which is a bet on appreciation) so I can to diversify further into cash-flow.

d) I can invest $300k in REIT index which yeild 4% / year, and get $1k / month. Since it's a fund, and not real hard-asset, so this no good. Plus the yield is dropping because price just hit all time high again.

3) My (temporary) requirements

a) Income stream should be be as passive as possible. I'm not a handy man, nor good at communication, nor active person, and very shy so because of this, many real estate strategies may not fit me well.

b) Rentals should be in property tax friendly and landlord friendly states. So I don't want to take any risk having to deal with tenant that don't pay and stay in my property for like 6 months (California) nor get a suprise property tax bill in Texas which can increase 10% per year!

c) I would like avoid cheap properties or one in warzone even they can produce more % return.

d) I'm willing trade off a bit of lower return for better neighborhood, a bit newer house with less maintanance, or area tend to have long term tenants (are they called B class neighborhood/property?)

e) The market should have at least some population, and job grow with a diversify industries.

f) Price should not have been appreciated for more than 40% since the last crash (I'm not sure the exact % here) .. I just don't want to overpaid for property or a bag holder here. Just want to minimize my risk here.

So given #3, seem like #2b would fit my needs the most. So my 2 main questions are

1) Is there a market that meet my requirements above? If so, any recommendations where I should look?

2) Since the properties may be in $100 - $125k price range in B class neighborhood, is this true that finding my own team would be better bet since most turnkeys work with C or D area? But again, I want it to be as passive as possible.. Technically, if I'm really lucky, I just need to find an AWESOME real estate realtor who can get me a move-in ready property, and connect me to a good property management company, who would then find me tenants.

What are your thoughts?

Thanks,

Vincent

Thanks all!

Instead of fixated on doing out of state turnkey, I'm gonna step back and think hard about my requirements, and see what markets and strategy meet my objective/profile and go from there.

I'm sure I'm gonna ask many many questions soon :-)

I'm Vincent, from Orange county, California. I'm here to learn about about REI.

I have set some extra cash for investing in buy-n-hold SFRs, and would like it to be as passive as possible. I have done extensive reading on BP in the past 2 weeks, and seem like turnkey route would be a great fit for time being.

My next step would be to identify some out of state markets that fit my criteria, and find a trust worthy and honest turnkey providers to do business with.

Happy to connect with other experts and not-so-expert in RE here :-)