I’m a brand new investor, no deals, don’t even own my own home yet, just starting my journey via books, podcasts, forums, YouTube etc…
Here’s my dilemma: I have a little over 100k saved. However, my wife got laid off start of the pandemic and I started independent contractor work, but no 2 years of tax returns for a conventional loan. My problem is too many choices!
a) buy a 3/2 here where I live (Chico CA) with a portfolio loan and 20% down and save again for another?
B) buy a duplex or similar and house hack?
C) try and acquire multiple properties in cheaper markets just as buy and holds?
D) BRRRR in my area?
Now I start listening to info on syndications?!?! Cmon! Somebody gimme a hand here! I’m flailing! 🙏🏻😅
Hey there, Daniel!
I’m also in Chico, CA! And relatively new to the game, as well. Although we’re maybe a couple of steps ahead of you, we’re asking some of the same questions re: our equity in our current home that we renovated.
House hacking with a duplex or triplex seems like a great way to get started. And in Chico, is a great buy-and-hold strategy with the University being in town.
If you want to chat more, feel free to reach out! 👍🏼
@Jeff Salbe I am not sure what are your long term goals. It seems like a great idea to get a HELOC on your property ( if it has equity) while its still owner occupied, you will have funds available when you find your next deal.
@Daniel Stevens all of the above are good , it would depend on your long term goals.
All the investment options require different skills to make them successful.
Househack - requires you and your wife to be on board.
Acquire multiple properties in cheaper markets - will require you to network well so you can find the contractor, property manager, lead source, etc. You may want to start with one property as a test.
BRRRR - requires to do identify properties that you can purchase under value, work with contractors, and have credit worthiness to refi(may need to wait the 2 years).
Syndications - you have no power on what the syndication does(pro and con).
Im a little ways away from you in the Bay Area. But there are many ways to "skin a cat". Yuba City has tons of potential if you want to stay local.
Or you can go out of state. I bought 12 properties in the first 6 months of investing in other states. It can be done. Let me know how I can help
This all depends on your goals and what you're trying to achieve. It sounds like you don't have a lot of time, but maybe your wife does. If she wants to be involved, then active investing could be a good choice. Doing something like a BRRRR could be a good option, if you can cash flow and actually refi and can your money back out, while maintaining good cash flow and a high DSCR.
Passive investing in a syndication could be another good option, if your main goal is passive income. This allows you to focus on your work and build the passive income. I have a few articles on syndication.
Hey @Daniel Stevens
I'm in Chico as well. I'm an investor as well as a real estate agent. There are some good deals but they go quick. Feel free to reach out and we can discuss some options.
Hi @Daniel Stevens . I recommend finding an experienced syndicator and seeing if you can do some mentoring under him or her. You can assist them with stuff you’re good at, and they can teach you stuff they have decades of experience in. I know a great syndicator in your area, Wes Hill. Reach out if you want a connection.
Welcome to the forum.
Syndications can be helpful to help gain insight and experience into the multifamily space. Investors get a look into business plans, key metrics, best practices, investor communications, etc. Good luck.
@Daniel Stevens After years of owning B&Bs I bought a duplex that I’m house hacking. While I don’t have a mortgage due to the sale of B&B, the rent pays taxes, water and sewer and gives us pocket change which then goes towards other bills.
I'd recommend a house hack in a 2-4plex if the whole family is on board. It's a great way to start and it cuts down on living expenses. Get an FHA 3.5% down loan and live there a year or two then do it again.
Especially if you’re young start now. I so wish I hadn’t quit real estate investing in my 20s. I’d be all set today. Now I’m starting over at 45.
@Daniel Stevens thank you for posting! House hacking where you are in Chico is a great way to get started in REI. If you are working as an independent contractor, does your wife have a W2 job currently? Why not do 10% down, no MI on a portfolio loan in another state outside CA? You have set yourself up well with lots of options indeed!
@Alecia Loveless bingo
@Daniel Stevens if you can't get the conventional loan yet, buy something with the cash and refinance or rent/stay where you are and continue to research the local market. It sounds like you have some business narrowing to do yet to determine the best investment route that fits you, your skills, your resources, and overall goals.
I can't tell you where to put yours, but I'll share what I'm doing with mine.
I'm Buying and moving into a small house in the midwest for around $75k, then put $10-$15k into it (always leaving some headroom in the budget) a house hack would be great for a long term stay since that should cover all or most of my basic needs, but will most likely end up flipping at it around $140k, and repeating, to build up enough capital to buy my own home cash, and then use a smaller sum to leverage up with hard money to keep the flipping going. Gotta buy my residencd in cash because i won't have w-2 income hard, and hard money, that I've found anyway, can't be used for a primary residence. At a 20% down, $40k cash be leveraged up to to $200k capital! Then I can start investing in the nicer neighbors and bigger properties (multifamily soon?)
But that's my plan! Hope it gives some inspiration!