Starting Out in High Priced Markets

Starting Out in High Priced Markets

Teacher · Sacramento, CA · Member since 2015 · 82 posts · 21 votes

Good morning!

My name is Clay and I'm (relatively) new to BP.  This is my first post and I just wanted to say that I am super excited to learn as much as I can-I'm even taking a couple real estate courses at a local community college! 

Anyways, I have been lurking for a couple days, have listened to BP's podcast for a few months and have read a few books.  Nothing, however, has really popped out and answered this question: how does one start off in relatively high priced markets if one doesn't have the capital to do it? I live in Sacramento, California and "cheap" houses are in the $100k range.  Anything middle class seems to be $250k or above.   I mean, I know the answer is low or no money down, but I'm not entirely sure what the process of that is nor am I sure the reserve I should have on hand for repairs/carrying costs, etc.  I'm sure there's a ton of information out there, could someone point me in the right direction or speak about their experiences?

Thanks so much for taking the time to respond!

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  • Software Engineer · Seattle, WA · Member since 2015 · 11 posts · 3 votes
    11y

    Morning Clayton, glad to see you're hyped and actively learning about REI!

    Do you need to have the property in your local area? Out-of-state turnkey properties could be a great alternative source of cash-flow - alternatively, you could look for deals in a wider radius of your current location. This is an dilemma many other BP members have, and I'm sure there's a few threads out there that (like this one) hopefully give you some insight into how they handled it. You should consider your budget, your risk tolerance, how much time you're willing to invest in doing research, and what skills / connections you already have. That will help you determine what kind of approach towards property types / financing / investing in general, you'll want to take. 

    It seems like you've already accumulated a sizable knowledge base - have you read the Ultimate Beginners Guide already, as well? It addresses some of the "how much money should I have on hand" questions you might have. The gist of it (of all deals) is, know your numbers - they'll speak for themselves whether or not a deal is good or not. Hope that helps, and welcome to BP! 

  • Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    11y

    @Clayton Rehmus

    Welcome to Bigger Pockets community. Be sure to check out “Learn” for all kinds of useful resources and free how to guides.

  • Teacher · Sacramento, CA · Member since 2015 · 82 posts · 21 votes
    11y
    Originally posted by @Victoria Liang:

    Morning Clayton, glad to see you're hyped and actively learning about REI!

    Do you need to have the property in your local area? Out-of-state turnkey properties could be a great alternative source of cash-flow - alternatively, you could look for deals in a wider radius of your current location. This is an dilemma many other BP members have, and I'm sure there's a few threads out there that (like this one) hopefully give you some insight into how they handled it. You should consider your budget, your risk tolerance, how much time you're willing to invest in doing research, and what skills / connections you already have. That will help you determine what kind of approach towards property types / financing / investing in general, you'll want to take. 

    It seems like you've already accumulated a sizable knowledge base - have you read the Ultimate Beginners Guide already, as well? It addresses some of the "how much money should I have on hand" questions you might have. The gist of it (of all deals) is, know your numbers - they'll speak for themselves whether or not a deal is good or not. Hope that helps, and welcome to BP! 

     Thanks for the suggestions!  I've downloaded the UBG and read through about half of it already!

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