Newbie from San Jose, California

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Newbie from San Jose, California

Eric GiovannucciBusiness Member
Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes

Well it is time for the paralysis analysis to end. I have essentially had my hand forced into starting my "investing". I am currently still on Active Duty in the US Army, and have been placed on assignment to San Jose, California for recruiting duty (blah). I have been planning on becoming more seriously involved in the real estate investing game, but have been to be brutally honest "scared". I am 25 years old and am married to my beautiful wife Alyson, we have two children together, Anthony (2.5 years old) and Dominic (1 month old) 

Short Term Goals: 

1.)Build a systematic approach to obtaining leads, and converting them into deals prior to starting. I forget where I heard it, but the reason businesses fail and franchises succeed is there "automation and systematized processes". I'd like to believe this will hold true within the real estate investing world as well. 

2.) Learn more through experience, possibly shadow someone local in exchange for some work so that I may get "hands on" knowledge.

3.) Use some of this knowledge I have obtained to use creative financing to obtain a residence for my family in South San Jose area

4.) Complete my first lease option deal prior to January 2015. 

Long Term Goals

1.) Build a solid team in multiple areas to invest in different markets. 

2.) Be able to feel confident in leaving the military to work within real estate full time (preferably investing solely right away, but backup plan is to possibly work as an agent)

I have sought out a paid mentor and he has helped tremendously thus far. However, I want to learn from multiple angles and even people that are within the current market that I will be living (I would like to start working East Bay). I think this forum will provide excellent networking, and would love to attend some local meetings with anyone that is active! 

I look forward to speaking with you all, local and far away, I am extremely grateful to have found this website, and podcasts (they made the drive from El Paso, Texas to San Jose, CA more enjoyable!) 

[email protected]
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y

Eric,

Welcome to Biggerpockets.  Thank you very much for your service to this incredible country.  No doubt you have found a great real estate resource.  Just absorb what you can.  Don't feel information overload.  Some stuff may not apply to you now.  Learning is progressive. It builds on itself. Take it one step at the time.  By the time you realized it, you have mastered all trades of real estate.

Let me warn you about investing away from job centers.  Remember that everything in life has a price.  There is no free lunch in the world of economic.  We, as human, tend to gravitate towards the path of least resistance.  Nevertheless, the path of least resistance will likely turn out to be rockier than we have anticipated or prepared for. Once we realized that the grass is not greener on the other side, the damage has been done.  As you already know, a bad financial decision can set us back a decade or much longer.  So tread carefully.
 

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  • Eric GiovannucciBusiness Member
    OP
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    12y

    Mod: I somehow double submitted, can you delete one of them, and this post. Still attempting to figure out how to use this forum. 

    [email protected]
    0Reply
  • Abhay K.Pro Member
    Investor · Fremont, CA · Member since 2012 · 64 posts · 45 votes
    12y

    Welcome. search forums, ask questions, and you will learn. Also best way to shrug off fear is to take the plunge. Locate a modest priced market nearby to get started. 

    2Reply
  • Account Closed
    Santa Clara, CA · Member since 2014 · 9 posts · 7 votes
    12y

    Welcome Eric, I am new myself.

    @Abhay What is your approach in a modest Market near here? Do you buy them when they are below comp and fix and sell? Are you buying for cash flow? Single family? I'm curious how you would analyze in the neighboring market - and how far away? Within say 2 hours? A few cities come to mind but they are far from the hi-tech jobs, so in my opinion a bit more of a risky investment. I like investing where the $$ is.

    1Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    @Eric Giovannucci ,

    Congrats on your work to pursue real estate, and thanks for your service Eric! You can absolutely do it and learn more through this and the local community. You absolutely have to talk to @Elizabeth C. and check out her website http://reluctantlandlord.net

    She has a military spouse, manages her own properties, and has built a portfolio of homes as they have moved around the country, using the military "transient" situation as a big benefit.

    @Minh Le is super knowledgeable about the San Jose market. And you should come out to @Johnson H. 's meetup in San Jose when he picks a date for Oct. For my first investment in the Bay Area, I bought an owner-occupied 4plex w/ an FHA loan. This is low-downpayment, and they use the rents from the other units to qualify you, so your purchase price goes way up. This might help you in San Jose. Definitely look into VA loans also.

    You came to the right place Eric! Great online and offline real estate network in the Bay Area. Come out, say hi, and learn with the rest of us!

    0Reply
  • Vala Shahabi
    Real Estate Investor · Santa Monica, CA · Member since 2014 · 199 posts · 32 votes
    12y

    Hey @Eric Giovannucci that's a great set of goals! Welcome to BP!

    0Reply
  • Eric GiovannucciBusiness Member
    OP
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    12y

    @Abhay K thank you for the suggestions! I am thinking of going out a little east of the Walnut Creek area, possibly Pittsburgh/Antioch/Oakley? Thoughts? 

    @Account Closed Thank you for the introductions to everyone! I am absolutely interested in meeting up! I am leaving Oct 5th and will be back in Dec, But consider me as active as possible as soon as I get back. 

    [email protected]
    1Reply
  • Account Closed
    Santa Clara, CA · Member since 2014 · 9 posts · 7 votes
    12y

    @Eric - Sounds great! I'm gone most of December but hope to catch one when I return.

    1Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    @Eric Giovannucci 

    Welcome to Biiggerpockets!

    Thanks @J Martin for the shot out!

    My husband is active duty Navy. We are buy and hold investors. We have done well using the transient military life to our advantage. We buy personals everywhere that makes sense. This allows us to invest with 0% down or 5% conventional, now that we have used up our VA loans. We rent these homes out when we leave. We also buy pure rentals as we have increased our income over the years.

    2Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    @Eric Giovannucci ,

    Ask @Kathleen L. about the Pittsburgh area...

    0Reply
  • Eric GiovannucciBusiness Member
    OP
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    12y

    Uh oh, I feel like the "new guy" that isinfringing on turf haha. 

    I suppose that is a question that has been in the back of my mind concerning networking. How do these groups work, if most are working within the same area? Does the competition create much tension? 

    [email protected]
    0Reply
  • BeBe Cheng
    Investor · San Jose, CA · Member since 2014 · 65 posts · 52 votes
    12y

    Welcome!

    Pittsburgh and Antioch areas are coming up. The Bart is extending the route. But there are no jobs locally. A lot of commuters. High rent in Bay Area chased some people out to those areas. 

    Do you know you can get great discount at Home Depot? If you are or were a veteran, you can get 10% or 15% discount. I am not exactly sure which number. But for sure is more the 2% the pro account getting.

    2Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Eric Giovannucci:

    Uh oh, I feel like the "new guy" that isinfringing on turf haha. 

    I suppose that is a question that has been in the back of my mind concerning networking. How do these groups work, if most are working within the same area? Does the competition create much tension? 

    No competition. Everyone likes getting together. For @Johnson H. and myself, the organizer of the group isn't selling any books, processes, coaching etc. Just getting people together. A lot of them on meetup.com are organized by some type of sales person trying to get people signed up.. but some are good. I like Joe Metz's meetup group in Fremont and @Andy Pollock's group at Harry's Hoffbrau in San Jose. Kathleen doesn't have a meetup. She just has some property up in Pittsburgh, so I thought you two could hook up.. She's awesome :) 

    1Reply
  • Eric GiovannucciBusiness Member
    OP
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    12y

    @Bebe 

    @BeBe Cheng I was unaware of that, I have always gone to Lowes as it was local, and never really asked. Sounds like a pretty good deal to me! Thanks for the tip! 

    @J Martin where do you normally post the meetings and "get together" online? Id like to be able to monitor them or be involved in any updates, if possible! 

    [email protected]
    0Reply
  • BeBe Cheng
    Investor · San Jose, CA · Member since 2014 · 65 posts · 52 votes
    12y

    You should ask lowes too. They may have similar program. My flipper's contractor uses his card on all materials.  Image how much you can save when you fix your properties.

    0Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    12y

    Eric,

    Welcome to Biggerpockets.  Thank you very much for your service to this incredible country.  No doubt you have found a great real estate resource.  Just absorb what you can.  Don't feel information overload.  Some stuff may not apply to you now.  Learning is progressive. It builds on itself. Take it one step at the time.  By the time you realized it, you have mastered all trades of real estate.

    Let me warn you about investing away from job centers.  Remember that everything in life has a price.  There is no free lunch in the world of economic.  We, as human, tend to gravitate towards the path of least resistance.  Nevertheless, the path of least resistance will likely turn out to be rockier than we have anticipated or prepared for. Once we realized that the grass is not greener on the other side, the damage has been done.  As you already know, a bad financial decision can set us back a decade or much longer.  So tread carefully.
     

    3Reply
  • Kenneth HynesPro Member
    Rental Property Investor · Easton, PA · Member since 2013 · 359 posts · 92 votes
    12y

    @Eric Giovannucci 

      Welcome to BP .  BP is a great resource. Full of great tips and reads. One tip that I picked up here is while you are starting out and saving money for your investments, start driving / visiting areas you would like to invest in so you get a feel for prices, rents , house conditions etc, and visit and look at lots of homes and open houses so your eye get used to looking at repairs / upgrades that are normal in a particular market. I really dont think you can look at too many properties, and the more you look, the more knowledge you will gain for that market. I find this helps when i PCS into a new duty location as well.  

    Check out the free BiggerPockets Podcast- A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 70 past ones to catch up on.

    Read some of these books ; personal favorites are the McAvoy books

    http://www.biggerpockets.com/renewsblog/2013/04/14/best-real-estate-books/

    0Reply
  • Abhay K.Pro Member
    Investor · Fremont, CA · Member since 2012 · 64 posts · 45 votes
    12y

    @Eric Giovannucci First identify price range you are going to buy in and if you are going to use financing, get pre-qualified. Exurb cities of bay area usually have modest prices. eg. cities along route 99 also cities you mentioned. Use redfin or other online sites to get past sale data to understand prices/sqft price for 3b1b vs 3b2b vs 4b2b. once you know this you will know what prices are good prices to chck out. Based on your skills, knowledge, time commitment you will choose fix and flip, simple buy and hold, rehab buy and hold.  some strategies like converting 3b1b to 3b2b or 4b2b may make sense. Then find a good realtor who works in the area and build a good relationship -- that investment will pay dividends. Remember prices in these cities fall hard, so compare prices to cost of construction and prepare to hold on during any downturn. If you have investment size for bay area, invest here!

        I am a weekend investor, I buy and hold in central valley. My goal is to move my investments closer to bay area once I reach critical mass. Looking at 1031 exchange, and 5+loan lender next. 

    1Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Eric Giovannucci:

    @Bebe 

    @BeBe Cheng I was unaware of that, I have always gone to Lowes as it was local, and never really asked. Sounds like a pretty good deal to me! Thanks for the tip! 

    @J Martin where do you normally post the meetings and "get together" online? Id like to be able to monitor them or be involved in any updates, if possible! 

     If you sign up on my meetup group, you'll get an email whenever I schedule one (Oakland). See REmeetup.com for a link. For @Johnson H. 's meetup, you just have to look on his signature for the updated link.. Maybe I'll put the next one up on my meetup group so everyone knows if he wants..

    0Reply
  • David C.
    Investor · Bay Area, CA · Member since 2014 · 207 posts · 190 votes
    12y

    Welcome Eric, I hope you will enjoy this REI game.

    Originally posted by @Eric Giovannucci:

    Uh oh, I feel like the "new guy" that isinfringing on turf haha.

    I suppose that is a question that has been in the back of my mind concerning networking. How do these groups work, if most are working within the same area? Does the competition create much tension? 

    About your question, I didn't know what to expect when I first attend the meetup few months ago, but I have learned a lot.  I got lots of good insight & ideas from people like @Account Closed .  They have recent & local experience for this market.  I just listen & try to absorb when I go to meetup.  I am pretty open myself on how I invest & flip properties.  The market is so big here, there are rooms for many players with different skill sets.

    Also, you can't do everything yourself nor you want to. For example, I am planning to invest in REI using my self direct 401k or IRA, but I can't self deal, so I would probably invest in somebody else project down the road.

    Hope this help & good luck.

    0Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @David C.:

    Welcome Eric, I hope you will enjoy this REI game.

    Originally posted by @Eric Giovannucci:

    Uh oh, I feel like the "new guy" that isinfringing on turf haha.

    I suppose that is a question that has been in the back of my mind concerning networking. How do these groups work, if most are working within the same area? Does the competition create much tension? 

    About your question, I didn't know what to expect when I first attend the meetup few months ago, but I have learned a lot.  I got lots of good insight & ideas from people like @Account Closed & @J. Martin  & @Troy Fisher .  They have recent & local experience for this market.  I just listen & try to absorb when I go to meetup.  I am pretty open myself on how I invest & flip properties.  The market is so big here, there are rooms for many players with different skill sets.

    Also, you can't do everything yourself nor you want to. For example, I am planning to invest in REI using my self direct 401k or IRA, but I can't self deal, so I would probably invest in somebody else project down the road.

    Hope this help & good luck.

     Likewise, I've learned a lot from David. A great resource of data and excellent (& busy) record on flipping. Thanks for the shout out.

    David, as much as we would all like for you to invest with us, you CAN do your own flips through a self-directed "Checkbook" IRA. I have a friend who works for PENSCO, one of the big self-directed IRA companies, in San Francisco. They will be coming out to the Summit also. I checked with him, and you can, and investors do, perform flips in their self-directed IRA. You just can't do any work or maintenance on the property yourself. And you don't, right?

    https://learn.pensco.com/investment-options/real-estate

    I will send you his contact info..

    You will have to figure out the UBTI/UBIT potential tax impacts, but I think they know some guidelines..

    0Reply
  • David C.
    Investor · Bay Area, CA · Member since 2014 · 207 posts · 190 votes
    12y

    Thanks J, I will definitely talk to your friend.  I heard different things & also depending on the number of flips you do.

    0Reply
  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    12y

    Hey @Eric Giovannucci welcome to the site! It seems like you have a good plan. If you need any kind help, always remember that you can ask it in the forums. See you around!

    BiggerPockets
    0Reply
  • Eric GiovannucciBusiness Member
    OP
    Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
    12y

    Thank you all for your kind and warm welcome, its great to be in such an awesome community already. I will be attending meetings frequently as soon as I get settled in. 

    Off to the first adventure, attempting to find myself a lease option here in San Jose, has not looked very promising thus far. We have already been pre-qualed for a 30 year VA, I am just unsure of this particular market right now and would like to have the option for a year prior to committing to a traditional mortgage. Any thoughts or tips on using creative financing within this area? We have also thought about going south to Los Gatos, Morgan hill or even possibly gilroy. I will be working in South San Jose by Almaden Expressway and Blossom Hill rd.

    [email protected]
    1Reply
  • Johnson H.Pro Member
    Investor · San Francisco, CA · Member since 2010 · 910 posts · 889 votes
    12y

    Hi Eric, welcome to BP! Come by to the next San Jose meetup happening on Friday, October 17. More information at the link below:

    http://www.biggerpockets.com/forums/521/topics/150283-san-jose-meetup---friday-10-17-14

    0Reply
  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    12y

    Hey @Eric Giovannucci thanks for jumping in and introducing yourself! If you haven't yet- be sure to setup some "Keyword Alerts" to get into conversation in your target area.

    Seeya around!

    Podcast Guest on Show #92
    0Reply
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