Investor · Livermore, CA · Member since 2014 · 5 posts · 5 votes
Hello everyone,
My name is Chris and I am a new investor currently in Livermore, California and work in the medical field. I have owned a few buy and hold single family residents in the bay area but I am interested in moving my investments out of the area to get better cash flow. I have been looking at the California Central Valley (Modesto, Stockton, and Sacramento) and also out-of-state (Dallas, Fort Worth, Austin, and Phoenix). My short term goals are to buy several SFR for buy and hold investments for passive income and building towards retirement. I have been listening to the Bigger Pockets Podcasts and reading the blogs for about a month and have found it to be a great resource. I hope to share my experiences and learn as much as I can from others.
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
Yes and yes. I bought a mostly vacant REO off the MLS (Homepath) with a partner a few months ago. Listing agent said only accepting cash offers, but convinced him to take conventional by offering directly through him (so he could make double commission). Closed conventional in 18 days.
I hit my target numbers on the first page of this posting below, w/ over $5k/mo rents, and $430K all-in cost after rehab. That's over $60K/yr gross income.. And probably worth about $550K. I got a great deal because I paid a near-cash price w/ a conventional loan, and the units were vacant and I knew how much rents had gone up, better than most people IMHO. I also checked out and talked to a lot of people on that street, and the property and street are better than the area it lies within, IMHO.
I also bought a property with a partner that was in probate, off-market from a wholesaler last month. Paid $20K for contract, and was still a great deal. $120/sqft for Victorian Duplex in West Oakland. Will take time, possibly years to turn around (tenants). But will cash flow nicely (1.25-1.5%+) on the back side, and have a hundred thousand apiece or so in equity. Unless West Oakland keeps going up in price. Then we'll make a lot more ;) I got this deal because I... NETWORK!!!!
@David Mamsa Thank you for your feedback. I am trying to determine what my options would be if I were to stay local.
Anna and David,
While I still favor Richmond and Oakland, I think there are still some good opportunities in Pittsburg & Antioch also. BART is going out to Antioch next year, then to Brentwood eventually.. Concord is nice. But these latter cities already are hard to get cash flow in w/ 20-25% down - at least REAL cash flow after all expenses. Of course, easier landlording and likely less potential variability in performance also than the former two. It's a trade off..
Some others taking the "middle ground" are still finding some deals in Hayward, Fremont, San Leandro, which don't have all the "heat" of the Peninsula, and have better CF than most of Bay, but still are close enough for most on the South side of the Bay to be more comfortable with, as far as proximity, and understanding the market better..
There are still deals though. Just keep your pencil sharp! Good luck!
I agree. It wasn't a slam on White Settlement at all. If you get a good cash flowing deal there, it's likely to continue cash flowing. I just personally prefer areas with a little more growth potential. Good luck!
I thought "White Settlement" was just some sort of strange phrase being used, but I just realized it's a city. Named for.. about what I thought.. white people (1941)
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
11y
J Martin lmao!!
That's awesome. I never really think about what "outsiders" must think about some of our town names here, and I had no idea where that one came from.
The next time you're in Texas, you should check out...
Cut-n-Shoot
Onalaska
Gun Barrel City
Monkstown
Tigertown
Or
Point Blank
You know I can't make that crap up!!!
In 05 they voted against changing the name because "as Konnye Wilkerson, 21, explained: "You shouldn't be afraid to be white. It's like showing we're not proud of our history." http://www.nytimes.com/2005/11/13/national/13white...
I actually always just guessed that the white in White Settlement was somebodies last name... but sadly no.
South Lake Tahoe, CA · Member since 2014 · 111 posts · 37 votes
11y
@J. Martin I think that the entry costs without enough cash flow is what is driving my curiosity about outside of the bay area. When you say real cash flow, do you mean without taking into account depreciation? I would like to offset some of what we have with actual money in our pocket each month.
@J. Martin I think that the entry costs without enough cash flow is what is driving my curiosity about outside of the bay area. When you say real cash flow, do you mean without taking into account depreciation? I would like to offset some of what we have with actual money in our pocket each month.
When I say "real," I mean able to realize, and control it, if necessary but operating it how it how it needs to be done. That's sometimes more difficult to do when it's a long ways away. But it's all about having the right team in place. People are doing it out of state too..
You get the depreciation expense on your taxes either way.. so not exactly what I was talking about here. But yes, I'm talking about actual cash flow, not tax calculations.. More about ability to achieve/realize it though..
Investor · Livermore, CA · Member since 2014 · 5 posts · 5 votes
11y
@Anna Shaver I would have to agree with David Mamsa. That the prices have gone up too much and are not proportionate to rent. For the same rent you could by a property out of the area for half the purchase price. As to get real cash flow you must not only take in to account PITI but also capex, vacancy rate, and management cost.
South Lake Tahoe, CA · Member since 2014 · 111 posts · 37 votes
11y
Welcome @Chris Siegler, it looks like you and I have similar goals. I have found this site to be an amazing resource. I have been looking at using the 1% rule, which works out to be about 10% vacancy, 10% management (I currently pay 7% but to give wiggle room), taxes, and insurance. Doesn't look like it would leave much for reserves if bringing in $200 a month but gives a quick initial way to calculate it.
I am currently in the beginning stages and just exploring my options. I am not certain I am going in any specific direction yet.