BiggerPockets

Wow lots of questions there.

You're in a tough area. Rent to prices ratios are very, making it nearly impossible to have monthly cash flow. Most buy-and-hold investors in the bay area are looking for appreciation, not cash flow.

You won't find motivated sellers at a REIA. You will find other people just like you who are looking for great deals. Its possible you'll meet some wholesalers who have deals. Whether they are good deals remains to be seen. But a REIA is a good place to make some contacts, and it would be worth checking them out.

Interest rates will be higher than 4.5% for a NOO, 30 year loan. I have one in the works with Chase at 5.5%. 680 is not a good credit score. You need to work on that. Above 750 would be ideal for getting the best rates on NOO loans.

You may have to go further afield. Sacramento, maybe?

Hey Jon,

Thanks a lot for the thought out response.

Looking into the Sacramento redfin, it seems that there are a lot of home are on sale, and there seems to be a downward trend in home prices. However, rents seem to be very favorable (like ~1k/mo for a 30k property). My biggest concern would be finding tenants in an area where so many homes/condos are for sale.

What are your thoughts on this?

Also, I might have a 740 credit score, but posted 680 to be safe, as I have a terrible memory.

Any idea why home prices in Sacramento are so low? These prices blow my mind - they're even cheaper than in Oakland, where the neighborhoods are very very rough. Ideally it wouldn't be more dangerous than San Jose, but I'm not averse to hiring an off duty uniformed police officer to accompany if trouble happens. I've never heard of Sacramento crime making it on the news.

Darius

Darius

The area with the 30K homes in Sac is not way as bad as say East Oakland.
I own a 2/1 condo in the Foothill farms area (Off Madison Ave) that I purchased for $29k. It is rented for $700 per month. Not sure you can get $1000 in this area but $700-$800 is very common.
Finding tenants? I had 22 calls on my unit the first 2 days. Rented it to the 2nd guy that looked at it as he had decent credit.

Look in Vacaville and Dixon there are many deals there and you can make money every month. A lot of the newer homes were sold with ARM's and everyone is losing there home because of that.

When you're just getting started, SFRs are safer. Its easier to dump these if you decide you don't like this business. Apartments have a much lower buyer pool.

If by creative financing you mean some sort of owner financing, I would go for that. Less hassles than a bank. Now, there are plenty of bad deals, but if you understand what you're getting, this is something to consider.

Just checked with my landlord, my credit score is better than I thought - it was 740 (is this good?)

@Jon Thanks for the suggestion. I'll dip my toes into REI with SFRs first. They seem to have a much better COCR than multi families anyway. Condos seem like a bad investment due to the association fees, right?

@Tin Stockton seems like a great place for cash flow after doing a bit of preliminary research on redfin. Are you worried at all about depreciating prices hurting your returns? I know RE has a long term uptrend bias, but I'm still very new to the game.

@Sagnik and Jeff, I will be looking into those two areas shortly, thanks for the recommendations. Going to be prepping for an interview on Friday, but hopefully will get around to it soon.

Thanks everyone,
Darius

Upon further research, it seems that Stockton has pretty high crime rates, rivaling that of Oakland. Looking into Sac, it seems like there are good areas, but there are bad areas as well (specifically North and South Sac). I'll have to look more into Dixon and Vacaville.

Darius,

If you want the most bang for your buck I would try to find a fannie mae homepath property in Sacramento county. They have very attractive financing right now for first time home buyers. Let me know if you need any assistance.