Hello from a Californian investor new to BP!

New Member Introductions

Hello from a Californian investor new to BP!

Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes

Hello BP!

I've always been interested in investing and bought my first stocks while in college in San Diego. It didn't take me long to realize that despite my research, I felt like I was essentially picking at random and didn't trust my ability to pick 'winning stocks'. That's when my interest turned to real estate. I didn't have the cash to get into the game at that time, but I knew real estate was the investment type for me.

About a year after graduation, my dad (who knew about my real estate aspirations) approached me about investing together in his neighbor's house in Rohnert Park (Northern California). We both jumped at the chance, which turned out be be not such a great idea- the cash flow was terrible. You live and you learn.

We've had that place for 2 years now (it cash flows a little better now and the equity is great) and I'm looking to use what I've learned for my next investment- a multifamily which I'm determined to make cash flow much better than my first try.

BiggerPockets has been a great help- I've been on here since sometime in January, I've listened to just about every podcast, I've read The Ultimate Beginner's Guide, but I hadn't posted until today. I'm excited to get involved, meet other investors, and share advice!

Nice to meet you!

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Most Popular Reply

Investor · Las Vegas, NV · Member since 2015 · 111 posts · 18 votes

Just remember

30 thousand invested in Texas will give you lets say 3 thousand in five years 15 thousand

at the end of five years the property value increased from one hundred to 117 in five years

where you are 30 and lets say you were short 1 hundred a month x 5 years =6 thousand

your property value increased from 325 to 395

Texas 17 + 15 =32 thousand total gain

California -6 + 70= 64 thousand total gain

Close to home

not to worry about manager stealing from you

not knowing the area

I have been doing this for 40 years

quit thinking about being laid off the company cannot operate without you

and if they were that stupid you would wind up with a higher paying job

in a short time and tell them thank you for laying me off.

Its all about positive thinking you can do whatever you set your mind to

when i was your age i told a couple of people that i wanted to be worth a million

dollars when i was 35 people laught at me i am the one smiling now .

Its all in the mind set your goal and stay on track and get away from negative thinkers

ENJOY

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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
11y
Welcome Kendra! Yep, living and learning is a big part of this biz. We've all been there. At least it sounds like your "learning" wasn't too big of a fall! And unfortunately that cash flow issue is kind of a CA thing. Me and a bunch of other CA folks invest out-of-state for that exact reason. MFRs can definitely be lucrative, and the key is in the numbers. Once you have those down pat, shopping for and buying rental properties will become a lot easier.
Good to have you on BP with us!
1 Reply
Chaz Reid
Investor · Fayetteville, NC · Member since 2014 · 916 posts · 190 votes
11y
Welcome to Bigger Pockets @Kendra Mattson
How did your stock selection turn out? I feel like I'm just picking randomness as well whenever I buy stocks lol
1 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
Originally posted by @Ali Boone:

And unfortunately that cash flow issue is kind of a CA thing. Me and a bunch of other CA folks invest out-of-state for that exact reason. MFRs can definitely be lucrative, and the key is in the numbers. Once you have those down pat, shopping for and buying rental properties will become a lot easier.
Good to have you on BP with us!
Yes, I definitely see the trouble in trying to find a good cash flow in CA. I'd like to invest out of state, but I'm a bit intimidated by the prospect (I've only lived in CA and don't know any other areas very well). Do you have a property manager, or boots-on-the-ground partner, or do you do everything long-distance?
Thanks for your welcome and your insight!
0 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Chaz Reid The stocks I managed myself were pretty meh. I'd gain a little then lose it and end up back where I started. I eventually started using my parents' financial advisor and he's been getting me 7-12% on average. When I saw that, I cashed out the stocks I'd picked on my own (with a very small profit after about 4 years) and used it for the down payment on my first property. Much better use of that money!
1 Reply
Chaz Reid
Investor · Fayetteville, NC · Member since 2014 · 916 posts · 190 votes
11y
I completely understand that
0 Reply
Joe Moore
Rental Property Investor · Los Angeles, CA · Member since 2010 · 804 posts · 230 votes
11y
Welcome to BP. I also invest out of state to get cash flow. It is scary at first but doable, though I still love LA for the equity build up over time.
1 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
11y
@Kendra Mattson Hi and welcome to BP! Well, if you've got a lot of growth equity in your current property, you could pull some out for a down payment on other properties - the power of leveraging.
1 Reply
Shawn Jacobs
Real Estate Broker · Grand Rapids, MI · Member since 2014 · 65 posts · 10 votes
11y
Hi @Kendra Mattson
I recently moved back to Michigan, after living and investing in San Diego. I've made every mistake possible, after switching markets. If it helps, I'd love to share what I found useful in SD.
1 Reply
Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
11y
Welcome to the BP family @Kendra Mattson you came to the right place to learn all about real estate investing and more! Here are a few recommendations for you:
Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet
Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
Wishing you the best!
1 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Joe Moore How long have you had held property in LA? It seems pretty impossible to get into now.
@Larry Fried That's actually what drew me to BP in the first place! I suggested using the equity to buy another place, but my dad was convinced that's how you get in over your head and end up bankrupt (I need my dad's much higher income to convince banks to work with me). I found BP while looking for the details of exactly how it all works out (and got a little caught up with reading/listening to EVERYTHING!) But yes, that's the most promising strategy at the moment.
@Shawn Jacobs That would be amazing! I'm not sure how anyone invests in this area at all. Your insight would be very enlightening!
@Dmitriy Fomichenko Thanks! I think those are exactly what I'm looking for at the moment.
1 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
11y
@Kendra Mattson The high bar to entry in California investment real estate play a large role in why so many choose to invest out of state. I live in Oregon, and the barriers are high enough here for cash flow, that I invest out of state entirely.
1 Reply
Aaron Hall
Real Estate Investor · Santa Rosa, CA · Member since 2014 · 60 posts · 33 votes
11y
@Kendra Mattson welcome to BP. I am up in Santa Rosa, not far from your first property. We just had a meetup in RP on Tuesday - we had a great time.
Cashflow in CA is hard to find. They are definitely out there but with so many people looking they are hard to get your hands on.
For starting out - think first about what you will do to add value to opportunities. Make a plan and jump in. Out of state advice - look for areas that interest you, setup criteria then start establishing your team. A piece of advice from out-of-state investors was use Zillow to contact RE agents in the areas you want to invest. Ask them to send you prospects/comps that meet your criteria.
Best way to find teammates is make sure they have skin in the game - this will make it a win/win.
Now that you have your first property down keep moving forward.
2 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Larry Fried Based on the responses to this post so far, I think I am going to have to start looking more seriously out of state. And that's why I love BP already. Who knows how much time you guys just saved me by not making me learn that the hard way!
@Aaron Hall Thanks, that's really helpful. The breakdown of how to actually get started out of state makes the whole idea sound a lot more manageable.
0 Reply
Manolo D.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
11y
Welcome Kendra. My sister is from San Diego, and I love the ambiance. I have done two modular school relcations (pre fabricated buiding renos) at pacific beach, it was GREAT! The project documentation was anightmare but the place was awesome! I just found out that SD has also a great potential for rehabs. I see a lot of for sale houses and distressed houses that need some love too.
0 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Manolo D. I've considered rehabs, but I'm worried that since everything is so expensive (and prices are going up) that even places that need a lot of love might not be a good investment. I guess it all depends on the numbers for each individual deal though. How long ago did you work in PB?
0 Reply
Ben Brunetti
Oakland, CA · Member since 2015 · 16 posts · 9 votes
11y
From one newbie to another, welcome @Kendra Mattson !
I have two sisters down in SD and it seems like a great market for REI. I would consider investing there, but it's not any easier than my home, the Bay Area.
Good luck on your investments!
0 Reply
Joe Moore
Rental Property Investor · Los Angeles, CA · Member since 2010 · 804 posts · 230 votes
11y
@Kendra Mattson I have had 2 homes in LA and lost both during the crash. I did draw out all of the cash before losing them and started investing in Houston. I still have those 4 homes because I paid cash for them. There was a steep learning curve there and having no mortgage let me survive. So because I paid cash for them, I still have them. I also bought a 5th home in greater Houston in 2014. The steep run up of prices in LA in a short period back in 03 to 06 cause me to pause and I decided to go out of state.
Prices has once again started to overheat and all who can afford the prices here are buying. I think prices will rise for awhile before it crash again. I intend to buy in LA again after we have another crash. I will be waiting.
1 Reply
Manolo D.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
11y
Originally posted by @Kendra Mattson:

@Manolo D. I've considered rehabs, but I'm worried that since everything is so expensive (and prices are going up) that even places that need a lot of love might not be a good investment. I guess it all depends on the numbers for each individual deal though. How long ago did you work in PB?
I think it was October 2014, not long ago. Distressed properties are good opportunities but even a 5 year rehabbed house can be a good deal, it all depends on the numbers. I am not a wholesaler, so I don't reach out to those distressed houses, I just pass them. Flipping is fast, especially if there is only a few permits to pull and will take 1-3 weeks to do. In 4-6 months you're in and out, acquisition to sold. Makes way better than 0.5% cash flow :)
0 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Joe Moore Oh I see. Thanks for the insight. Yeah, I definitely want to buy in SD when the market crashes again.
@Manolo D. I like your strategy and it sounds great, possibly the only real money-maker in this market at the moment. But I also see you are a contractor, so I'm going to assume you have a lot of knowledge/skill/experience that makes flipping less of a risk for you than me. I think if I did that (at least the first time) I'd want a partner so we could double check each other and commiserate and share the responsibility of getting the place turned around ASAP.
0 Reply
Manolo D.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
11y
@Kendra Mattson Yes, I am sure that the contractor finding part is easy, i have subs that i work sometimes (if its a specialty) and i find it easy to find, i am not sure if it's experience looking but i hever had problems, just had to screen them really well. We do 95% of our work on commercial tenant improvements so its less to no risk of "contractor not showing up on job day", that will set you back a few days because it will domino effect on your schedule, and it will not provide you the right screening process as you are now in a hurry to get it done than hiring the right one. holding costs is everything, especially if funds are coming from HML. Keep us in mind if you are going down on that road, I might need lessons on the investment side of it too.
0 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Manolo D. Yes, I'll definitely keep you in mind if that's the direction I decide to go! Thanks!
0 Reply
Jacobus Bor
Investor · Las Vegas, NV · Member since 2015 · 111 posts · 18 votes
11y
Kendra
Stay where you are forget about that little bit of cash flow be more concerned
about building the equity as that will help you in the long run a lot more than that bit of cash flow as the out of state will give you some cash-flow but what about that appreciation
if you add that to your return you are probably way ahead of the others
Good luck and keep buying
1 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Jacobus Bor That's true that the appreciation is good here, but I like the idea of going somewhere for cash flow for the financial independence. I would like to have a good holding of properties giving me enough cash flow that I don't have to panic if I'm laid off or have some other financial emergency. Ideally, when the market turns down again I'll buy in CA and get both the appreciation and cash flow. But based on the posts here, I've decided to explore more possibilities than I was originally considering. Thanks for the input!
0 Reply
Jacobus Bor
Investor · Las Vegas, NV · Member since 2015 · 111 posts · 18 votes
11y
Just remember
30 thousand invested in Texas will give you lets say 3 thousand in five years 15 thousand
at the end of five years the property value increased from one hundred to 117 in five years
where you are 30 and lets say you were short 1 hundred a month x 5 years =6 thousand
your property value increased from 325 to 395
Texas 17 + 15 =32 thousand total gain
California -6 + 70= 64 thousand total gain
Close to home
not to worry about manager stealing from you
not knowing the area
I have been doing this for 40 years
quit thinking about being laid off the company cannot operate without you
and if they were that stupid you would wind up with a higher paying job
in a short time and tell them thank you for laying me off.
Its all about positive thinking you can do whatever you set your mind to
when i was your age i told a couple of people that i wanted to be worth a million
dollars when i was 35 people laught at me i am the one smiling now .
Its all in the mind set your goal and stay on track and get away from negative thinkers
ENJOY
3 Reply
Kendra Mattson
OP
Investor · San Diego, CA · Member since 2015 · 67 posts · 23 votes
11y
@Jacobus Bor Thanks, that does make sense. And your example is pretty much what happened with my current property.
0 Reply

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