CA investors - which strategy worked best for you and why?

[Arya Feroz]

Hi BP community,

I am an aspiring investor who has tried to jump into the REI game a few times this past year but still no property, and truthfully, confused as to what the best strategy would be for me. I know this differs greatly for everyone, depending on current situation and desired outcomes, but I'd love to hear some examples of what has worked for other California investors!

Background: I'm in the SF Bay Area where prices come at a high ticket. I work a day job at a FinTech company and I'm looking to build a rental property portfolio over the next few years that replaces my salary, and allows for eventual financial independence. My sister and I tried offering on a number of properties in the Oakland/East Bay area but were outbid, and even with renting by the rooms, just wouldn't make a healthy enough ROI with our limited capital. We switched our strategy to the Fresno market where the lower entry points were very attractive but I'm noticing most of the homes are built in the early 1920's and rents aren't so strong to where I question if it is worth it to start in Fresno as opposed to an out of state market that might offer stronger ROI.

Any tips, insights, stories, or suggestions are welcome!! :) 

[Arlen Chou]

@Arya Feroz what has worked for me was to slow down and to focus on the "macro goal" and get away from the "micro goals"... The biggest frustration that people run into is the people can't find a strategy that reaches their "quicker scalability" goals. But the follow on question should be, "quicker compared to what"? We live in a world where everything is based upon immediate gratification. But the reality of success is that it built upon years of hard work especially in real estate. 

You will read a ton of posts about people who are successful with a single deal here or there, but few people post up about the deals that went to sh*t. What you and your sister need to do is find a strategy/business niche that fits your personality and personal goals. Don't force your strategy to fit other people's successes. I have made a ton of money with the strategy of buy & hold using sweat equity to drive value up. But I like to work with my hands and tearing out drywall or laying flooring is fun/therapeutic for me. A weekend getting dirty is not work for me, it is fun. If that doesn't sound like fun for you then the sweat equity play is probably not for you. I know that my personality will not allow me to be hands off with a team in another state. I would want meetings and reports all the time... they would hate me! So I invest in other people's deals, I don't partner.

My point is that if you are hopping considering markets and asking strangers for strategies, you might want to slow your roll and figure out what kind of investor you are first and then seek out specific individuals that are doing things that mirror your interests. 

I hope I don't come across as condescending, that is not my intent. I have just seen too many burnout and disappear from BP because they went down a road based upon potential ROI without considering their personality fit to that particular strategy. I wish you the best of luck!

-Arlen