Pull Money From Our Home in the Bay Area then What?

10 Replies


My wife and I are wanting to pull money from our own equity in our home to purchase our first investment home. We were leaning towards a multifamily in the cities around the bay area but was told and have read the risks of unstable tenants.

We were looking in Modesto area on Zillow so far just to get an idea. We do want to do the BRRRR once we do buy the property. Here are our concerns though.

1. We don't have a contractor we trust to work with.

2. We don't have a real estate agent we trust to work with

3. How much do we put down on the investment property from our home equity?

4. Should we refinance our home to pull the equity or do an equity line of credit?

Any advice is welcomed. Thank you in advance.


You're probably better off doing a BRRRR on a single family rather than a multi family. I would attend some local meetups in your area to see if you can find a good agent. They usually show up to those meetings, and have connections with other vendors. The whole point of a BRRRR is pulling your money back out. So ideally, you want to pay cash for the property as well as the rehab costs.

If you have a low rate loan right now, it probably wouldn't be best to do a refinance. You will end up with a higher rate. If that's the case, it's best to get a line of credit. Be sure to look for a fixed rate HELOC versus an adjustable one.

Here's the good news: There are solutions to all the problems you've named! There are good contractors and agents out there, @Aristotle Kumpis gave a great recommendation that you should go to local meetups to find those folks. It'll take time to build those relationships.

Familiarize yourself with the laws in California. They are exceptionally unfriendly to property owners.

You'll need to get off-market deal flow coming your way. For larger properties you'll need to build broker relationships. Smaller properties can usually found through wholesalers.

Pick up a copy of the BiggerPockets BRRRR book. It'll teach you about the process. Learning is critical at this early stage!

Hi @Violeta Escobedo ! As a fellow Bay Area resident, I know the frustrations that you're currently facing. I'd say the best thing to do is to attend the local meetups in the East Bay. My buddy @Bryan Pham hosts one in Oakland, there's another big one in Hayward, and one in Walnut Creek as well. I also host meetup events, but mine are in the South Bay (San Jose).

I recommend people getting a line of credit to pull equity out of their home. It lets them move quickly without having to pay interest on the loan amount before you even need the capital.

Good luck with your investing journey and feel free to reach out to me if you have more questions!

Violeta- I would say do your research on what areas you would like to invest in. If that is Modesto, then get an idea of what rents are in the area. Modesto is a diverse city in the sense that there are some really nice areas and some areas where you wouldn't want to leave items of value outside. 

As far as making the numbers make sense, that is a whole different situation. If you are going to find anything that would fit the BRRR method, it almost needs to be from an off market deal. Those are a little difficult to come by. I would recommend looking for wholesalers in the area or send postcards to Multi-unit owners that might be looking to sell. The rental market in Modesto is really strong right now, so anything that makes sense on paper and is listed on the market you might not be able to get your offer accepted.

As far as renting the house out; I would highly recommend hiring a property manager for the first year or so. If the numbers don't make sense to hire a property manager at least have one to fill the vacancy for you. Having experience when filling the vacancy might be the most important thing when you are renting out a house. I'm sure you've heard of those horror stories of tenants not paying rent and/or having to deal with an eviction. A lot of those problems can be avoided by doing those background and credit checks. 

If you need a contractor, I can refer you one in the Modesto Area. He is super responsive and reasonable on prices. 

The biggest issue is finding the right deal. If you find the right deal, then all of the other stuff will work out just fine. I would say finding the right deal is step one in your investing journey. 

Good Luck!