Jesse From SoCal looking to invest (got real Numbers)

Starting Out
6yFollow

Jesse From SoCal looking to invest (got real Numbers)

Jesse Felix
Member since 2019 · 15 posts · 3 votes

Hello everyone! I been looking through the blog post and I am so impressed with this community (reddit watch out!)

Here is what I want to do, just like many of you I want to replace my W2 income with rental properties. I want to spend time with my wife and my three kids!

* I’m 30, married live in SoCal. Me and wife are debt almost debt free we have a RV and the mortgage.

* roughly 16k in the bank.

* wife a teacher makes 45k/year

* I am a manager at Starbucks 70k/year

I want to get started in SoCal. I am looking at the following area Riverside, Palm Springs and surrounding areas.

My questions are

How should I start? (Someone please tell me)

What kinda loans should I get?

What questions should I ask my lender?

I am looking forward to seeking help! I am totally the person that shares everything after being taught. I would pass this info forward to help the next person!

Thank you again

1Reply
29 views

12 Replies

Jump to latestLatest
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    6y

    Hi @Jesse Felix-

       Given your present situation, I would encourage you to plow as much money as you can into your savings.  With a 6-figure income and near-zero debt, I'd encourage you to try to put a few thousand a month in the bank.  Have you looked at house-hacking?

    0Reply
  • Jesse Felix
    OP
    Member since 2019 · 15 posts · 3 votes
    6y

    Hey John!! I grew up in La Quinta! 

    we purchased a home like a month ago. I have a mortgage. 

    How much should I save up and what should I go for? 

    0Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    6y

    @Jesse Felix it depends on what area and type of property you want to invest in as to how much you'll likely need.

    0Reply
  • Jesse Felix
    OP
    Member since 2019 · 15 posts · 3 votes
    6y

    Let’s say riverside how much would I need to have

    0Reply
  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    6y

    @Jesse Felix duplex? triplex? SFR? Orangecrest? Jurupa? could be 25% of $275k or 25% of $500k depending on what and where

    0Reply
  • Jesse Felix
    OP
    Member since 2019 · 15 posts · 3 votes
    6y

    Okay! I know my questions are simple answers but it brings me to conclusion of it’s just that get the down payment and find the deal and then manage it and BOOM! You are investing and if you manage risk you will cashflow

    0Reply
  • Eric Kramer
    Real Estate Agent · Palm Desert, CA · Member since 2015 · 11 posts · 2 votes
    6y

    Hi Jesse, 

    I currently live in Cathedral City and am in search of a SFR that I can house hack. I am a realtor and work part time at a brewery tap room in downtown Palm Springs. I have come across multiple "deals" via the MLS (targeting the Palm Desert and La Quinta cove areas). That said, I have determined that the best route of action would be to target distressed homes that are not listed for sale. Being an agent, I have access to a few different tools provided by my guy at Chicago Title. My plan is to start calling/mailing/door knocking these properties to see if I can come across the right home that fits what I am looking for.

    All said, I am not married, make around $20k per year and have access to some capital for a down payment via family. I highly recommend interviewing local banks and lenders to evaluate loan options. If you are able to HELOC your current home or are willing to move, that may open up opportunities when it comes to down payment options as well as different loan programs. Aside from that, @John D. hit the nail on the head. Stuff as much cash as possible under the mattress every month (figuratively; I am currently in that process too). 

    While I have been focusing my search in the Valley, speaking with lenders, asking for referrals when it comes to title reps, and seeing what tools some of these folks have to available can be a great way to pinpoint the properties that fit what you are looking for. 

    Best of luck!

    Eric Kramer

    CA BRE #01988890

    0Reply
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    6y

    @Jesse Felix if you can embrace the game of "how much money can I save every month", you will position yourself well for not just the first down payment on the first property, but the ability to maximize the opportunities you may find over a longer term.

    The game of "how much can I save" is great training for the game of "how much can I earn" when hunting and analyzing deals. 

    0Reply
  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    6y

    @Jesse Felix

    Don’t skimp on the education phase. I think that properties you can add value to are what makes real estate so powerful, so I’d think about how can I make this property more valuable every time you look at something. You’re better off saving money in bank than doing something you might regret so learn learn learn and plan to take action with 6-12 months.

    Podcast Guest on Show #373
    0Reply
  • Kina De Santis
    Real Estate Agent · Orange County, CA · Member since 2019 · 23 posts · 3 votes
    6y

    Is there extra land on your property where you can add an additional dwelling unit? If you can house hack with the house you currently own, that will enable you to save more faster.You could also focus on saving for your next home, buy your next home in a year and keep this one as a rental. 

    I'm also in the SoCal area and getting ready to find a property, but I'm trying to save as much as possible now! 

    0Reply
  • Jesse Felix
    OP
    Member since 2019 · 15 posts · 3 votes
    6y

    @Kina De Santis I have renters in two on my bedrooms currently not much just under a 1k. I have someone making me payments on a car I sold with interest, not much. We currently can save 2k a month after all expenses are plus savings. 

    Saving saving saving sounds like it’s the trick!

    0Reply
  • Kina De Santis
    Real Estate Agent · Orange County, CA · Member since 2019 · 23 posts · 3 votes
    6y

    @Jesse Felix that's awesome. It's cool to hear about someone making house hacking work for them, especially with a family. My current plan with my partner is to buy a house, live in a room and rent the others out, save money in the process and then buy a new house in 1 year with a 5% conventional owner-occupied loan. Eventually we want to refinance and get a duplex or a 4-plex, but those can be pretty expensive for where we are looking for. We're trying to save as much as possible and it sounds like your advice is what we need to do! 

    Here's the cash breakdown of what we are looking to accomplish. Keep in mind that we are living at home with parents now to save money. 

    • $25k - 5% downpayment for a $500k house in Orange (this is pretty low for the Orange Area) 
    • $10k - house savings fund - in case the roof breaks the day after we buy it
    • $15k - rehab costs - if we can get a $500k property in Orange worth buying, it's going to need rehab
    • $15k - Savings in case something goes terribly wrong and one or both of us loses our jobs

    With each property we purchase, we plan to follow a similar formula of adding to our savings and conservatively budgeting for potential issues. Hope this is helpful! 

        0Reply
      Join the conversationCreate a free account to reply, vote on answers and follow this thread.
      Log InJoin for Free