SF or somewhere else?

Question

I've recently moved to the SF Bay Area for work and am very interested in getting involved as a passive real estate investor. The downside is that it is a very expensive market, and I don't have a lot of capital. I'm here for at least 2 years, so I'm trying to decide between two options:

1) Save up some cash, then move to another city where my capital can go a lot further.

2) Stay in SF for the longer term, and get started immediately learning the ins and outs of real estate investing and building a network.

#1 is good because I have more capital to get going, but #2 gives me an extra 2 years of experience and networking. What are your thoughts? Thanks!

Robert Britton · Answer

Thanks for the advice! It didn't really occur to me to look elsewhere than the city, so that's definitely an option worth exploring.

As for SF, there doesn't seem to be much I can do when the average place costs over $1M - it doesn't look like I'm able to get financing at the moment for that.

Lexi Colt · Answer

Just food for thought...You are not necessarily limited by your geography. You can always partner with people in cheaper city or even look at cheaper cities in Cali  yourself that are an hour or two away from SF.

With respect to relocation... or being in one geography for an extended period of time... Realize that man makes plans and God laughs. Whatever you go with make sure that you have multiple exits.

Max James · Answer

Regardless of where you live or what decision you make, start committing as many hours a week you feel comfortable with to LEARNING more about REI.  I personally would spend 6 months or more learning more about SF area, the REI strategy you want to take, and then make a decision.  I personally wish I would have started getting into 2-4 unit MFR when I first moved to Cincinnati, since I'd have 3 more years of REI under my belt AND I wouldn't have dropped over $1,000/month on rent (literally threw about $40,000 down the drain over 3 years of renting).

If you are going to jump into the game sooner rather than later, which can absolutely be a great move, just make sure you understand what you are getting into.

Also, don't worry about where you physically live.  I had that same mindset going into my first property.  I was worried about what I would do if I potentially moved out of the area.  What you'll learn is that if you want to make serious money, you won't need to lift a finger to manage the property physically.  You'll have your own team in place and can be 1,000 miles away from the property.  Good luck!