Newbie from California

Folsom, CA · Member since 2015 · 4 posts · 7 votes

Hey everyone,

Found out about this website from the Financial Independence sub on Reddit. I'm currently 31, married with two kids and a third on the way. I work full time in a corporate job, but constantly dream of financial independence.

I currently own my primary residence as well as a rental property. I'm scared of "leveraging" but I also want to aggressively build my real-estate portfolio so it can generate residual income. I'm looking to be able to quit my full time job and have real estate supplement my income, but I'm scared to go all in, especially with a young family and things like health insurance.

I'm looking forward to expanding my knowledge and interacting with people here who've been successful in achieving financial independence through real estate!

- Charles

3 Reply

49 views

9 Replies

Jump to latestLatest

Sort by

Rachelle RodaviaPro Member
BiggerPockets Support · Manila, Philippines · Member since 2015 · 1k+ posts · 149 votes
11y
@Charles Ho
Welcome to the Biggerpockets community! Glad to have you with us.
0 Reply
Mark Nolan
Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
11y
@Charles Ho
BP is full of useful resources such as forums and blogs. Welcome to the Bigger Pockets community-be sure to check out all the awesome BP blogs under “Learn.”
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
11y
@Charles Ho
Welcome to the site. I would not be too afraid of leveraging. That is the name of the game. Let your tenants buy your houses for you.
0 Reply
Paul Timmins
Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
11y
@Charles Ho
Welcome.
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). You can Google to locate them and go to meetup.com
Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook
You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book
Good Luck
Paul
0 Reply
Maureen McCann
Specialist · Birmingham, AL · Member since 2014 · 81 posts · 68 votes
11y
Hi Charles,
Welcome to BP. You are definitely in the right spot to get the right information you need to make the right decisions.
Here is my 2 cents on leveraging...It makes sense to get that money that is sitting as equity in your primary residence working for you & earning for you. With your corporate income and a good credit score 680 or higher you can qualify for investor loans which are dirt cheap right now, 4.5%-5.5%. With the abundant amount of houses around the country you can pick up for under $100K in B-C type neighborhoods, your $20K down payment could secure you a passive income of $4K a unit per year. Multiply that by 10 properties and now you are talking having a passive income of $3K per month. Once the debt service is paid down (thank you Mr. Tenant) now you have a $1M portfolio spinning off $8500-$9000 a month passively.
If I lost you there, allow me to summarize.
$200K investment can control $1M in real estate assets.
20%-25% down on properties valued at $100K or less will allow you to acquire 10 properties. (let's just say you invest in 1 property a year for 10 years...slow and easy)
If you were to take all of the passive income from each property and apply it to 1 property you can have property #1 paid off in less than 2.5 years! Crazy talk? No way. This is what I do and it works.
My vote, is to take out a HELOC or better yet an ALL in 1 Mortgage, leverage your equity to acquire multiple rental units, have the tenant pay down the debt over time and set yourself up for $8K + a month in passive income. With 3 kids, you can purchase an investment property for each kid now. Set up the notes on 15 years. Have the units paid off prior to the start of college and wa la, you now have college tuition paid for for each kiddo.
0 Reply
Patty C.
Homeowner · CA · Member since 2014 · 125 posts · 33 votes
11y
@Charles Ho
Hi Charles,
Welcome to BP! This is a fun and informative place to learn real estate.
The Ultimate Beginner's Guide is has a lot of good information to get you started. There is lots of information on this website. It's like drinking from a fire hose.
You may be interested in the local forum in Sacramento. Go to Forum > Forum Categories > Local Real Estate > California Real Estate Q&A > Sacramento if you want to hear what is happening in your area and see who is in your area.
If you are afraid, find out what is behind it. It will lead you to questions you can ask that, in turn, can help you with the answer.
You have a great start with your primary and rental property :-).
0 Reply
Arnell Enriquez
London, Greater London · Member since 2015 · 108 posts · 13 votes
11y
@Charles Ho
Welcome to BP! There are tons of information here on BP. Enjoy and learn the site. Ask and network to members. Goodluck
0 Reply
Jason HansenPro Member
Real Estate Agent · Elk Grove, CA · Member since 2014 · 18 posts · 2 votes
11y
@Charles Ho
Welcome to BP. I agree leveraging is intimating, but big risk = big reward! If your scared as am I that means you should do it.
0 Reply
Marylou Antonio
Transaction Coordinator · Saratoga, CA · Member since 2015 · 22 posts · 0 votes
11y
Welcome to BP Charles
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.