We currently own 3 single family rentals. Originally our goal was long term hold and retirement. However, I have changed strategies and am now looking for near term passive income and financial freedom.
I’m looking to move into multifamily and eventually commercial down the road. I am located in Thousand Oaks, CA and looking into acquiring property in L.A. area and Ventura County. With Southern CA prices being so high I am also open to investing out of state as well, ideally I would like to stay local though.
I’m looking for any advice with creative lending strategies.
Let’s connect! I’m in Thousand Oaks as well.
@Amanda Davi There are many creative lending strategies. You can use a Hard Money Lender to purchase a property all cash and then use the BRRRR strategy to invest in the deal. Or use a private money lender- a private lender can draw up a note and lend you the money for a certain amount of interest. The note uses the property as collateral. You can also use a rental contract (lease to own) where you rent the house to a tenant and they have the option to purchase at the end of said time. I actually have a partner here in Tucson that is doing this very successfully. I can connect you with him if you are interested. Another option is seller carry where the owner carries the note. I would check out Matt Faircloth's Raising Private Capital-there are some amazing tips in this book.
The BRRRR method seems to be the most popular strategy I am seeing in today's market. It's important eave your options open though, especially during a time when the market is fluid and constantly changing. Some of my borrowers choose to sell right away if they can make a good return, others aren't so concerned with making a return, and choose to keep the property for passive income once they spruce it up to rental standards. Feel free to connect if you like! Always happy to help!
Hi I am in Thousand Oaks as well and looking to get into real estate , but some SFhouses I have seen on Zillow lately , they are all negative cash flow and less than the 2% . I would like to learn more about the possibilities here .
That was my thinking when I initially went into turnkey rentals from 2009-2014.
With 300 dollars per property (2 months of work to buy a turnkey rental) you are going to need 20-40 of these to replace your income. I had 11 of these and good systems in place but still had 1-2 evictions a year and 3-4 big things that were normal annoyances like plumbing leaks, damages from hurricanes, or some vandalism. Image if I had 30, just 3 x those numbers.
Directly investing in a turnkey rental or small MFH is a good way to start to learn and build up the war chest to go into my scaleable investments such as private placement syndications. Whatever you do, try to be as close to the investment as possible.
If you need help LMK
I think the key is to branch out from CA into better priced markets with better fundamentals and legal protections for landlords.
Hi Amanda, I am an agent, investor, house hacker, and Airbnb Superhost here in Ventura. Are you looking to keep the three rentals? Have you considered selling them and 1031'ing them into something with better cash flow, like an out-of-state apartment complex? There are plenty of markets around the country with WAY better ROI's than what you'd find here. I've been investing in Kansas City and love it. Not sure what your living situation is, but purchasing a house hack could also help you achieve FI significantly faster. I'd be happy to connect if there's anything I can help with.
Hey Amanda, I am a commercial insurance broker who specializes in writing multifamily properties nationwide. I’d start with 1-4 units as you can use a conventional loan. Anything above 4 units all have to be commercial loans. Let me know if you have any questions as it relates to insurance!
Great to see that you are making the transition into multi-family from the single family space! My brothers and I made a similar decision last year and it has been going great! We are also chasing the passive/financial freedom that can be obtained at a faster rate in multi-family due to the economies of scale. We started out by talking to different mortgage brokers + lenders. We are syndicating deals therefore we will use OPM to take deals down, and then use these relationships to secure long term debt. This is how we plan on obtaining deals.
Regarding location- we invested in our own backyard- NC! Luckily our market is a great one to be in at the moment. What markets out of state are you considering at the moment?
Have you looked at Charlotte, NC? It is a great investment market. It has a major airport, lots of sports/activities, drivable to a beach or mountain on a Friday afternoon, strong rental and real estate market. The city itself is very nice, with lots of options for outdoor activities, restaurants, shopping, etc. There's a diverse economy with banking, manufacturing, healthcare, tech, real estate, along with other industries, which means the local economy is more robust than what you would find in other parts of the country.
CLT has had constant population growth for quite a while, which means continual demand growth for housing. Within the city limits has some pretty expensive (and increasingly so) areas, some pockets of the town and the suburbs (Concord, Huntersville, Belmont, etc) are far more affordable and offer better long term rental ROI. Within the city, you will find strong appreciation and solid ROIs for flips/new-builds and short-term rentals. Overall, we are experiencing appreciation from 10% to 16% year over year (depending on location).
I can help if you have any CLT-specific questions, feel free to DM me. I can help with any questions you might have about the market as I have investment experience with everything from large multifamily portfolios (250 units) to SFR'S with first time investors in NC and San Diego.