Newbie in Bay Area - The Journey Begins

Newbie in Bay Area - The Journey Begins

Investor · Castle Rock, CO · Member since 2015 · 38 posts · 24 votes

Hey BP Community,

Read the books, heard the stories, and saw the results from the members on BP. Now my life is "ruined" :) 

As of writing this post, my Real Estate investing experience is a big fat 0. Like the thousands of folks in the BP community, I've had my life "ruined" by guys like Robert Kiyosaki, Brandon Turner, Joshua Durkin, and the hundreds of other investors who've shared their experience and success around escaping the Rat Race. The asset column for me looks like my checking account did at 12 years old :)

I'm a 31 year old San Jose native. I've been working as a tech sales rep since 2007 in the San Francisco area (huge surprise). The money is great, but the feeling I get when I see my commissions dwindle due to taxes after all my hard work selling complex products, I get sick to my stomach. With each paycheck, my gut wrenches a little more. Not any more!

Which leads me/you to my "WHY" for joining BP: simply put, I want my upcoming children to have Dad and Mom around. I want to be free, like many of you in this community, to live with larger amounts of joy and happiness that financial freedom provides. I'm also recently married to the love of my life, which is another, much more more glamorous expense in life :) Beyond the bay area cost of living, we're planning on having a sizable family in the coming few years, which will add to our "glamor expense". I'm going out on a limb here and guess children come with thousands of incredible moments and milestones that are, at least in the minds of my wife and I, non-negotiable to be a part of. Having a job in tech sales is not conducive to being in attendance at these events. 

So here's the GOAL: To be financially free and out of the Rat Race by 41 years of age. 10 years to freedom. My tactic: buy-and-hold investing in single and multi-family homes; with appreciation as the cherry on top :) I see this goal evolving into learning + profiting from other real estate avenues as well ( i.e. flipping, etc..)

The challenge: I live in California (Bay Area)....enough said, y'all know the barriers to entry here. So how to address this challenge? I love the house hack strategy to start, which could be coupled with long distance investing. The strategies could be endless. Any BP members who read this intro and have some ideas, as a newbie I'd eat EVERY bit of information up.

Look forward to learning and the journey toward financial freedom with all of you in this community. Lets get started...

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y

@Travis Limbocker  I would adjust your thinking Appreciation is what will make you money in 10 short years.. if you have to leverage up rentals it certainly won't be those that will make you financially free..  access to loans and capital with constrain you.

My whole career is based on the homes I owned in Milpitas Palo Alto, Napa Valley appreciation is the great wealth builder there.. there is nothing better than selling your home and pocketing 500k TAX FREE and the bay area is the place you can do that in a decade. Not many other places you can do that. 

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  • Investor · San Jose, CA · Member since 2014 · 294 posts · 113 votes
    10y

    Welcome to BP @Travis Limbocker 

  • Investor · Castle Rock, CO · Member since 2015 · 38 posts · 24 votes
    10y

    Thanks @Robert Musallam for lighting the way!

  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    10y

    Hey @Travis Limbocker welcome once again! 

  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    Welcome, @Travis Limbocker.

    > I love the house hack strategy to start, which could be coupled with long distance investing. The strategies could be endless. Any BP members who read this intro and have some ideas, as a newbie I'd eat EVERY bit of information up.

    A realtor that also manages properties isn't a bad idea.

    Bay Area stock of multi-unit isn't priced as crazily, for what you get, as our SFR stock.

    Make sure you understand the rent control laws, if applicable, in the towns you are looking at.

  • Investor · Milpitas, CA · Member since 2015 · 278 posts · 155 votes
    10y

    Welcome @Travis Limbocker!

    We're going to have a San Jose meetup next week.

    https://www.biggerpockets.com/forums/521/topics/26...

    Hope to see you there!

  • Real Estate Agent · San Jose, CA · Member since 2015 · 94 posts · 73 votes
    10y

    Welcome Travis. Im a SJ native as well, work in BioTech in South SF so I hear ya about getting crushed in taxes. I invest in the central valley since that is where my family is from and lives so I know the area well. Good luck to ya, wish I started when I was 31! 

  • Residential Real Estate Broker · San Mateo, CA · Member since 2013 · 585 posts · 264 votes
    10y

    @Travis Limbocker welcome! You are 100X ahead of most people in identifying what you are trying to accomplish (and reading good text that helps you shape a strategy for solving it).

    As others have mentioned, one of the best solutions to the affordability issue in the Bay Area is house hacking. Also, before you commit to out of state/distance investing, make sure you talk to some of the local investors on the board/at some meet ups.

  • Investor · Castle Rock, CO · Member since 2015 · 38 posts · 24 votes
    10y

    @Andrew Wong thanks for the heads up. See you there. @Jason Clark thanks for the welcome! Tech is great, but that earned income tax is like a bi-weekly punch directly in the nose! I'm also interested in areas outside of the Bay Area (for obvious reasons), so I will absolutely pick your brain when the time is right.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Travis Limbocker  I would adjust your thinking Appreciation is what will make you money in 10 short years.. if you have to leverage up rentals it certainly won't be those that will make you financially free..  access to loans and capital with constrain you.

    My whole career is based on the homes I owned in Milpitas Palo Alto, Napa Valley appreciation is the great wealth builder there.. there is nothing better than selling your home and pocketing 500k TAX FREE and the bay area is the place you can do that in a decade. Not many other places you can do that. 

  • Investor · Castle Rock, CO · Member since 2015 · 38 posts · 24 votes
    10y

    @Jay Hinrichs really appreciate the insight, especially on my first day on BP! Your experience in the area and the success with your wealth through appreciation gets me even more excited to engaging with this community. I have historically been a conservative guy (from a money perspective), which no doubt lends itself to my buy-and-hold strategy and building wealth via rental income. That being said, I joined BP in large part to learn how to manage greater amounts of risk to achieve greater wealth. Profits from home appreciation is ABSOLUTELY a goal of mine, and the cash flow through rental / passive income is my starting point. It's the learning process of getting to that $500k tax-free check that I'm excited about. Thank you for the input; no doubt it'll help me evolve my GOAL overtime. Look forward to engaging further with you.

  • Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y

    Welcome Travis! I love your intro :)

    I live in LA, so same issues here, so I've always just done out-of-state investing for the cash flow. Unfortunately, house-hacking doesn't necessarily do much in most of the bigger CA areas because your mortgage is likely not getting covered by the other units, and even if it is, it's unlikely the rest of the expenses are. So, CA properties aren't going to do much for you in terms of cash flow. Appreciation potential? Better than other markets for sure, but that's a separate strategy.

    There are definitely options out there though and I love your enthusiasm!

  • Investor · Castle Rock, CO · Member since 2015 · 38 posts · 24 votes
    10y

    @Ali Boone great to connect with you. Yes, CA is daunting as a first-time investor and difficult to get started in. I share you sentiments around CA properties not being great candidates for substantial cash flow. I figure if I assess 100 properties, I may find 1 or 2 where the numbers work out - I have yet to find those diamonds in the rough though. Good news is analyzing properties is great practice and there's and endless sea of them. I'd be very interested to hear some of your appreciation successes (and failures) in the CA area and/or the out-of-state. If you're happy to do so, I can message you directly?

  • Jo-Ann LapinPro Member
    Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
    10y

    Welcome to BP. Happy to network.

  • Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y

    I haven't done anything in CA so can't speak that that, but I have done out-of-state. I think I read it that you are asking about appreciation successes or flunks specifically? I just had a huge appreciation success on one of my out-of-states.... I bought it in late 2012 and just refinanced it this past summer for $40k over what I bought it for, so $40k appreciation profit in my pocket....in the form of cash :) And even with the refi it still cash flows every month. And mind you, I only bought it for $95k, so $40k in appreciation on that is pretty hefty.

    Now, to be clear though...I bought in Atlanta when it was at it's infancy stage of the expansion cycle, so that amount of appreciation stemmed from that. With how the RE economy in general is now, there really aren't any markets out there right now that would appreciate at that level in that amount of time. But it can still happen. CA will always be your better bet for appreciation levels, but unless you are buying a property for cash...the numbers really don't work out very well. And you will certainly be losing money every month waiting on it.

    Yes, definitely feel free to message me directly any time!

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