Starting with investing, flipping and ultimately passive income

6 Replies

Hi all!

Love BP and the community here!  This is my first post but I've been a lurker on the forums for about a month.  Listened to about half of BP's podcasts on youtube, read Rich Dad/Poor Dad, networked with a few real estate agents, had a few discussions with my finance broker, etc.  Signed up for BP Pro to take advantage of the analysis tools. So I've done tons of research and analysis and just wanted to pick the brains of members here before I dive head first.

I am looking for my first residential investment property in Oakland, Stockton, Modesto and Sacramento. Was initially  looking to purchase cash flow positive multifamily properties but now I'm considering flipping to get some experience and capital for larger down pay and then purchase passive income properties later.  I do have a commercial property in Hayward that's doing well for rental.  I do not want to sell that nor refinance at this point.  I have 15 years of architecture experience and currently work for a large global architecture firm so I am not afraid of construction, contractors, project management, etc.  I have good salary income but want to get out of the rat race.  Got about $70k for investment money.

So the problem is that my credit is not great.  Basically bad decisions with credit cards and wife's student loans for med school.  I am in the process of trying to clean some of that stuff up and pay down some credit cards.  According to my finance guy (who I used to refinance my commercial property years ago) said I can go with hard money, which means 30% down, which puts my budget in the 200k range and that's not including rehab money.  I currently do not have anybody I can co-sign with but that may change if I dig deeper and may ask some family members. 

But given the current situation, I would love to hear your thoughts and suggestions.  I prefer to invest/flip in properties that is in the SF Bay Area (yeah right with these prices) to Sacramento...somewhere I can drive to, see, touch.  May consider south such as Fresno or LA but the distance is what's stopping me, plus not familiar with that market.  Open to ideas, suggestions, thoughts...

Thanks!

Paul

@Paul Choi ,

Welcome former lurker!
Luckily, there are lots of awesome people to network with, learn from, and work with in the SF Bay. 
Congrats on getting started and ready to dive deeper.. Have you gone to any local meetups? 

@Katie P. and @Merced F. have a meetup in the East Bay each month, @Beau Eckstein has one closer out towards your area (Walnut Creek I think..?) We're also having a conference with a few hundred BiggerPockets members, podcast interviewees, and local meetup leaders in Oct in if you can make it (check out signature)

Before you get too down and out over your financing situation - talk to @Chris Mason here on BP.  He has a bunch of non-conventional products that are made for people who are making money and have downpayment money, but maybe a little weaker on the credit side. 

It would be tough to get started flipping in the Bay with that kind of capital. Some areas like Richmond, Vallejo, Stockton, etc, have lower price points - or you can partner up with another flipper to combine your capital, and get some more direct hands-on experience before you take that risk yourself.. 

I own in Richmond and Oakland, but just hold them, and don't flip. Also do some Airbnb rentals. Working well so far... 
Happy to put you in contact with some other folks. I do know it's getting more and more difficult to find deals now - so you're really going to have to pull yourself up by the bootstraps, meet some folks, and get hard at work if you want to close the good ones.. 

Welcome Paul! And hope to meet you in person soon when I get back from Seattle next month :)

Thanks @J. Martin !  All great info.  I will look into the Oct gathering. Would love to connect with fellow BP members.

I'll reach out to @Chris Mason to see what my other options are.  I've found a few properties in Sacramento and Stockton that look promising.  Either for flipping or rental plays.

Will look into doing some local networking.

Thanks!

@Paul Choi If you purchase a property with a hard money loan , It does not matter what your credit score is. Most hard money lenders look at the property. They look to see if you purchased it under value and if you have some money to put into a project. Now the hard part is finding a property to flip for a profit. You will need to network with people and or send out direct mail marketing to find someone wanting to sell at the right price. You can send me a message if you need suggestions on hard money lenders. You can look for a private individual to lend you the money temporarily until you sell the house. 

Thanks @Tim Jones !  Merced does interest me, especially properties near UC Merced.  But first I want to get a deal or 2 under my belt at someplace local that I easily drive to.  Once I gain experience, I hope spread my wings to properties up and down California.  

Thanks @Gordon Cuffe !

I have secured private investors to fund the deals but I'm always open to new funding options.  I'll send you a message.  And like you said, it's finding the deals that's the hard part!  Doing whatever I can right now to grow my network in this industry.  I'm about 2 weeks into doing this and have a couple of deals I'm analyzing right now.  Hustling to get a deal under my belt so that I can officially say that I bought my first residential investment property!