Newbie from California, looking for greener pastures

New Member Introductions
11yFollow

Newbie from California, looking for greener pastures

Chendra Grandhi
Tracy, CA · Member since 2015 · 19 posts · 2 votes

Hello everyone at BP,

Very excited to see the amount of knowledge sharing happening at BP. Hoping to venture into REI through this medium.

I am from bayarea California. Looking for rental properties with cash flow (not easy in bay area). What would be good counties or cities for atleast 1% income properties? Also, appreciate guidance in finding good property management as I would be heavily depending on them. Being new to REI as a whole I prefer properties with less work upfront.

I started looking at Austin, San Antonio Texas based on some of postings at BP. Open to any other areas.

Ready to start with 150k as down payment.

Thank you,

Chendra Grandhi.

1Reply
93 views

Most Popular Reply

Radhika M.
Investor · San Jose, CA · Member since 2014 · 167 posts · 146 votes
11y

@Chendra Grandhi

Welcome to BP. Good luck with investing but just be sure you do enough research before you jump into out of state or even in state to area's you do not know much about. 

Some times things seem greener on the other side than the reality.

2Reply
See this reply in the discussion

31 Replies

Jump to latestLatest
  • Micki M.
    Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
    11y

    With 150k you could get into a few SFHs or smaller multifamily in the Midwest.  Do some searching on Milwaukee, Indianapolis, Columbus and you'll find some good people that will help you explore different options.

    1Reply
  • Chendra Grandhi
    OP
    Tracy, CA · Member since 2015 · 19 posts · 2 votes
    11y

    Thank you. I will start looking at these areas. 

    0Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    11y

    @Chendra Grandhi I'm from the Bay Area also. I like both Indianapolis and Kansas City for cash-flow and ROI. We sell turn key's in both of those markets. Feel free to reach out if you'd like to know more about either market.

    0Reply
  • David GreeneBusiness Member
    Real Estate Broker · San Francisco Bay Area, CA · Member since 2012 · 225 posts · 266 votes
    11y

    Hey Chendra,

    I'm right up the byron highway from you in discovery bay! You're likely not going to find anything worth owning in CA anywhere close to the 1% rule. I stopped buying in CA years ago and started buying in AZ. I've also started looking in texas. 

    Podcast Guest on Show #12
    0Reply
  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    11y

    Hey @Chendra Grandhi welcome to the site! It's great to have you!

    Podcast Guest on Show #92
    0Reply
  • Chendra Grandhi
    OP
    Tracy, CA · Member since 2015 · 19 posts · 2 votes
    11y

    Mike, David,

    Appreciate the pointers. I am excited to explore these new areas. From your experience with investing out it state, could you tell me some does and don'ts? I am using calculator on BP and looked at a few other online, any recommendations? 

    0Reply
  • Tom Murray
    Irvine, CA · Member since 2015 · 4 posts · 4 votes
    11y

    Hi Chendra

    I am a newbie as well to bigger pockets.  Riverside and San Bernardino Counties are your best bet.  I manage a couple a rentals and owned two in Indio.  1% rule applied.  One of my properties actually gave me 1.5%.  Still some deals, but not many.

    Tom

    1Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    11y

    Welcome to BP community @Chendra Grandhi It is a great place to meet new friends and learn about various aspects of real estate 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

    Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

    Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

    If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select that person below. He or she will be notified of being tagged so that the conversation will continue.

    Wishing you the best!

    0Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    11y

    I don't know about percentage rules, but if I had your money to invest, I'd buy a multi-family building in Chico or Arcata as close to the university as I could.  They're much more affordable than you'd think.

    When the market crashed, I was managing a building in Santa Clara.  We learned that students are immune to crashing economies.  The owner didn't want to rent to students, but when we ended up with 20% vacancies almost overnight when people were losing their jobs left and right, we revisited renting to students (university across the street), and targeted law students.  Fantastic tenants.

    I think you can find rentals right here in CA.  And, remember that property taxes in CA are very stable and remain based on your purchase price for as long as you own them.  And think about how much easier it would be to go check on your rentals just a few hours away by car.

    People forget to look right here at home.

    2Reply
  • Chendra Grandhi
    OP
    Tracy, CA · Member since 2015 · 19 posts · 2 votes
    11y

    @Sue Kelly,

    Yes, it would be great to be able to check your properties easily. Some thing I consider important.

    0Reply
  • Adam Ng
    Los Angeles, CA · Member since 2014 · 29 posts · 8 votes
    11y
    How are vacancies like in Riverside? Any property owners out there having trouble finding stable tenants there?
    0Reply
  • Radhika M.
    Investor · San Jose, CA · Member since 2014 · 167 posts · 146 votes
    11y

    @Chendra Grandhi

    Welcome to BP. Good luck with investing but just be sure you do enough research before you jump into out of state or even in state to area's you do not know much about. 

    Some times things seem greener on the other side than the reality.

    2Reply
  • Richard Dunlop
    Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
    11y

    I went to school in Santa Clara.

    I lived in Orange County. (Tustin)

    Either of those with your $150,000 will get you cash flow. But it will be NEGATIVE cash flow.

    I relocated to Michigan because of the opportunities up here.

    $150,000 can get you $20,000 a month in Positive cash flow.

    Metro Detroit has problems! Yes but it also has SF Houses that would sell for $10,000,000.00 in today's down market.

    Downtown Detroit has one of the highest occupancy rates in the country. (Some figures say more than 99%)

    This is Downtown only not the city as a whole but it makes for tremendous opportunities in the bordering areas.

    0Reply
  • Mark Shaffar
    Real Estate Agent · Madison, WI · Member since 2015 · 328 posts · 88 votes
    11y
    Originally posted by @Dmitriy Fomichenko:

    Welcome to BP community @Chendra Grandhi It is a great place to meet new friends and learn about various aspects of real estate 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

    Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

    Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

    If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select that person below. He or she will be notified of being tagged so that the conversation will continue.

    Wishing you the best!

     If you are interested in learning more about Indianapolis and Milwaukee you could set up keyword alerts for those words to. That's what I did.

    0Reply
  • Ramon Jenkins
    Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    11y

    Welcome aboard

    0Reply
  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    11y

    Hey @Chendra Grandhi welcome to BiggerPockets! This is the perfect place to learn more about REI. You can check the Learn tab above to get some free resources on getting started.

    BiggerPockets
    0Reply
  • Radhika M.
    Investor · San Jose, CA · Member since 2014 · 167 posts · 146 votes
    11y

    @Richard Dunlop

     Not to divert the topic but I have seen you post a in one other thread that you could get 20,000 dollars in cash flow per month for 150,000 investment. Really you are saying your getting 240,0000 dollars return every year on 150,000 dollars invested. Wow. That is 200% return.

    Don't mean to be a skeptic but can you please let us know what kind of properties and price to rent ratios you are talking about? Are you doing the management yourself?

    1Reply
  • Marlon Wilson
    Houston, TX · Member since 2013 · 1k+ posts · 114 votes
    11y

    Hi @Chendra Grandhi!

    Welcome to biggerpockets! Wishing you all the bet on your real estate venture!

    Keep growing!

    0Reply
  • Gordon CuffePro Member
    Investor · Roseville, CA · Member since 2009 · 1k+ posts · 587 votes
    11y

    Most states are greener than CA because of the drought. The one bummer about texas is that real estate taxes are 3% of the homes value. Insurance is expensive also.  St Louis, Kansas City and Toledo are great cash flow markets.

    1Reply
  • Richard Dunlop
    Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
    11y
    Originally posted by @Radhika M.:

    @Richard Dunlop

     Not to divert the topic but I have seen you post a in one other thread that you could get 20,000 dollars in cash flow per month for 150,000 investment. Really you are saying your getting 240,0000 dollars return every year on 150,000 dollars invested. Wow. That is 200% return.

    Don't mean to be a skeptic but can you please let us know what kind of properties and price to rent ratios you are talking about? Are you doing the management yourself?

     I've given one specific example several times I've shown the deed and rent payment to multiple people by PM on this board. Non of them have come back and admitted they saw proof. But they do stop ridiculing my statements. 

    I bought a 2 bd house all in for $806. It had a tenant in it for more than 3 years when I bought it; I've not yet spent anything on it in the 5 months I've owned it. It rents for $650 per month and the tenant pays there own utilities. 

    0Reply
  • Radhika M.
    Investor · San Jose, CA · Member since 2014 · 167 posts · 146 votes
    11y

    @Richard Dunlop

     Thanks for replying back. I am not trying to say what you are saying is wrong. I just wanted to understand how the numbers worked. Sorry if you have answered this before and I missed

    Yes if you can but a how for 806 and rent for 650 I can see how you will that much cash flow. Are these D or F area's that the houses sell for 800 dollars? I would assume if you can buy for 800 why is the tenant paying 650 not buying.  Just trying to make a logical sense thats all.

    But what ever it is it looks like it working for you so congratulations.

    0Reply
  • Kevin Wood
    Investor · Houston, TX · Member since 2013 · 471 posts · 267 votes
    11y

    I live in the Bay Area as well and just picked up 5 homes with my business partner (living in Houston). Houston seems to be a competitive market right now, so you have to go outside the MLS a bit to find good SFR deals. We're trying to work a multi-unit right now. At least with the BP community seems to be a little less competition.

    1Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    11y
    Originally posted by @Gordon Cuffe:

    Most states are greener than CA because of the drought. The one bummer about texas is that real estate taxes are 3% of the homes value. Insurance is expensive also.  St Louis, Kansas City and Toledo are great cash flow markets.

     There ain't no drought way up here in Del Norte Pole County :-)  There is a park across the street from my apt with acres and acres of lawn.  I moved here in November and have never seen it being watered (by sprinklers) and it is green as green can be.  

    Same for Humboldt County.  Chico is probably a different story, being in the Central Valley.

    But the entire state is not dry.  In fact, I believe my toes are becoming webbed...

    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    Hey Chendra! Yep, unfortunately CA may not be your pick if you want 1%. Austin isn't going to give that either (unless you find a really sneaky unlisted deal somewhere). San Antonio would be an option. All the Texas cities tho will be lower on cash flow because of high Texas property taxes and insurance. Philly and Birmingham are amazing for cash flow right now (way more than 1% ratios) and there are some other ones. Indy is decent, and some others.

    0Reply
  • Aaron Gordy
    Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
    11y

    @Chendra Grandhi

    Hi Chendra. I am a real estate broker and I manage properties in Austin Texas. If you have any questions about Austin let me know. I will fill your head full of info about the city as I have lived here for over 15 years and have been practicing real estate for over a decade. I am, obviously, a big believer in Austin. 

    $150k down could buy you some nice properties here, btw. 

    Welcome aboard!

    Aaron

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free