New to Real Estate - Hello!

8 Replies

Hello all!

My name is Mike and have been “lurking” around Bigger Pockets for about a month now. In listening to the podcasts, I figured it was time to stop lurking, and time to jump in and say hello and introduce myself. There is SO much information in these forums my head spins when I find myself going down a rabbit hole on a particular topic. I’ve been listening to the BP podcast a few hours a day and am finding relevant topics to newbies. I’ve been interested in Real Estate since college when I took a RE economics class and fell in love with the opportunity it presented. However, fast forward life, kids, etc., I’m now in my early forties and find myself now with money saved and ready to methodically venture into this. My main focus is cash flow and my goal is to replicate my salary within 10 years, which might be a bit aggressive. Funny enough, I work at a bank and am good with numbers and have always wanted to leverage my analytical strengths to better benefit me instead of my employer.

I live in San Jose, CA and know that I don't want my first RE experience to have a high tuition cost so buying in the immediate Bay Area is out, but have read some discussions around Stockton, Modesto, and Merced that sounds like it might be a viable option. I grew up outside of Sacramento so am aware of those cities, but that's where my familiarity ends. Many of those posts I read regarding those markets were around 2012-2014 timeframe so I'm not sure if those are still as viable to cash flow (although I'm sure there are always opportunity if one knows where to look). I have seen some experienced folks on here making themselves available to others' questions, but when I messaged them, I didn't hear back. Now that is more than likely because I got so overzealous I didn't notice the post was from 2013 and they may no longer be in this space. Is there a real estate club of sorts in San Jose? I did a search, but it didn't turn anything up. I started looking around using the MLS, but know choosing the right area (and ignoring even certain streets in an area) is paramount to making a good decision and need to start working with people familiar with that area that can work with.

While I do have money saved up, I am also wondering how feasible it is to get traditional lending and then going through a private lender to finance the rest or at least reduce the 20% down amount to not down the money into the house – oh, and so that it cash flows? Does it take a few traditional financing ones under your belt before this is even an option? Are there any discussion threads I should focus on that could help?

I have been nothing but determined to get into real estate the more I listen to the podcasts and the more I read the forums here but at times feel overwhelmed when looking around, and am concerned about buying in an area I know little about.

I look forward to continuing to read all of your insightful experiences and takeaways in the forums and hope one day I can build up enough experience to provide the same.  

Cheers,

Mike

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@Mike Santos   Welcome to BP Mike!

Many questions in your post, I can comment on a few.  I live in So CA but invest in VT, where I'm originally from and it has worked out well.  I agree you generally need to seek out a lower priced area if you want it to cash flow.  Certainly I would recommend investing in an area you know well, or at least have a property manager you can trust. That's definitely the hardest part of investing out of area.  I do like CA as an overall market as the population is increasing, housing is scarce, and property taxes are fairly low (1%).  Income taxes are terrible though.

Regarding using a private lender for part of your financing and the rest conventional, no , generally it's not allowed.  Cleanest way to do it is have the 20% down upfront and then maybe you can do a loan with a PML after that, which reimburses part of your down payment.  Make sure if you're securing that with a 2nd mortgage, the 1st mortgage lender will allow it.  You can also seek out seller finance deals where you may be able to put 10% down.  I've done a few of those over the years.

Good luck!

- Tom

Welcome to BP @Mike Santos !  Glad to see you finally join in on the conversation.  

There are so many ways to start, and so many markets to choose from.  I think if you just continue what you are doing and browse forums, listen to podcasts, and look over some of the deals analysis done on the forums, you will get the knack for putting properties through the ringer to see if the numbers work.

And if you are a numbers guy....you are already WAY ahead of the game here.  10 years is a great goal!  With strategic moves, you can make it happen.

Thank you @Tom S. @Cara Lonsdale @Grant Rothenburger for the helpful feedback and warm welcome!  I will definitely look into affordability within CA, the 203k option (how prominent those are in my area), as well as continue to educate myself with the greater minds found on this site in the forums!  Thanks again!

@Mike Santos I have found 203K loans to be great, but there is a lot of red tape.  Many pros, but also many cons if you are not prepared.  I started a discussion on the subject here: The 203K Loan: Open Discussion.  Lots of great stories of people who had success and nightmares with this type of financing.

@Mike Santos , welcome to BP!!!  Best is to research an area before investing in it otherwise you are putting yourself at high risk and you don't want to make mistakes at the start of your investing journey that will leave you with a bad taste of real estate investing.  Network with others who are local to the areas of interest and ask them about what is going on.  The more people you talk to the better your perspective will be.  If you're interested in Sacramento area, @Al Williamson is hosting a networking party this Saturday, feel free to join, would be good to connect.

Originally posted by @Billy Amberg :

@Mike Santos I have found 203K loans to be great, but there is a lot of red tape.  Many pros, but also many cons if you are not prepared.  I started a discussion on the subject here: The 203K Loan: Open Discussion.  Lots of great stories of people who had success and nightmares with this type of financing.

 Many thanks for the 203k post.  Great info there!

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