New Member from California - San Francisco bay area

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New Member from California - San Francisco bay area

Drew Sukovich
Martinez, CA · Member since 2015 · 5 posts · 0 votes

Hi all,

My name is Drew Sukovich and I live in the San Francisco Bay area.  New member here with little to no experience in real estate investing other than purchasing my own home about 20 years ago and going through the great intro course on BiggerPockets.  That is what landed me here - did a search for intro courses on real estate and found this wonderful site.  I'm looking to start investing later this year as part of my move into retirement in about 10 years.   Been living/working in the bay area for over 20 years.  My house is almost paid off, kids are done with college and I'm now interested in starting a new phase in my life as I get closer to retirement.   Current plan is to learn as much as I can over the next couple of months, make some new friends and potential colleagues here on the BiggerPockets and start my real estate investing career later this year.  I'm already sure that I'm be a buy and hold investor focused on cash flow.  The real question is now what niche and location. 

Cheers,

Drew

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Ryan Landis
Residential Real Estate Broker · San Mateo, CA · Member since 2013 · 585 posts · 264 votes
10y

@Drew Sukovich welcome! If you have not already included listening to all of your podcasts in your "intro" course, I would highly recommend doing so.

In terms of what actionable steps I think you might try to do over the next couple of months, start getting a feel for what you feel most comfortable with. Does property management sound interesting to you? If not, then try and schedule some meetings with some PM's and pick their brains.

I would also highly recommend that you speak to a lender earlier on in the game. You do not need them to go through the whole process with you (i.e. pre-approval yet) but just get familiar with what they are going to expect/ask of you so that you can get financing (at least the conventional way).

If you have any questions, feel free to reach out ask as the Bay Area BPer's are pretty active.

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    Welcome.

    > The real question is now what niche and location.

    Multi-unit in modest income areas of the Bay seem to be the most consistent winners, from the financials, tax returns, operating income portions of appraisals, and so on, that cross my desk.

    There are of course exceptions to every rule - there are winner SFRs out there, and poorly performing multi-units that are a nightmare to maintain (100 year old Victorians that have been converted to multi unit in Oakland and Alameda LOOK gorgeous, but as an investment... hmmm). So do your due diligence and make sure you have a home inspector you are confident about.

    I'm also a fan of realtors for investors that themselves either have rental properties, or that do property management on the side, or similar, but again there are exceptions.

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  • Julia Tse
    Professional · Cupertino, CA · Member since 2015 · 62 posts · 5 votes
    10y

    Welcome Drew!

    I am a real estate broker in Bay Area.  I invested out of state for cash flow myself.  But if you want only in Bay Area, you will get a little bit of cash flow (with 25% down) for Multi-units in Pittsburg, Hayward, San Leandro and even Martinez, CA.


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  • Ryan Landis
    Residential Real Estate Broker · San Mateo, CA · Member since 2013 · 585 posts · 264 votes
    10y

    @Drew Sukovich welcome! If you have not already included listening to all of your podcasts in your "intro" course, I would highly recommend doing so.

    In terms of what actionable steps I think you might try to do over the next couple of months, start getting a feel for what you feel most comfortable with. Does property management sound interesting to you? If not, then try and schedule some meetings with some PM's and pick their brains.

    I would also highly recommend that you speak to a lender earlier on in the game. You do not need them to go through the whole process with you (i.e. pre-approval yet) but just get familiar with what they are going to expect/ask of you so that you can get financing (at least the conventional way).

    If you have any questions, feel free to reach out ask as the Bay Area BPer's are pretty active.

    1Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 132 posts · 50 votes
    10y

    @Drew Sukovich

    Welcome to BP, Drew. I share your B/H philosophy, though the payout with B/H might be delayed given the home values in the bay area. There are some places in the north bay that would offer you higher initial cash flow (assuming 20 - 25% down), though you'd have to consider C-class neighborhoods for your investment. Many B/H REI look in Sacramento for cash flow.

    In addition to the podcasts, I recommend the ebooks under the "Education" tab at the top of the page.  There,  you'll find some great resources. 

    0Reply
  • Drew Sukovich
    OP
    Martinez, CA · Member since 2015 · 5 posts · 0 votes
    10y

    Thanks all for the warm welcome.  As several of you have mentioned I have a lot to learn and your comments and suggestions are helpful and much appreciated.  I have a friend r who is currently successful as a buy and hold cash flow investor in Sacramento and given the high valuations in the bay area probably will focus my attention there or potentially in the Chico/Paradise area.  I'm quite fond of Chico and may even be interested in obtaining my own property there sometime so this might be a good place to consider given the entry level cost to invest is much lower than the bay area.  In the mean time I'll take all your advice and keep learning as much as I can and start networking with property managers in those area's I'm interested in.

    Cheers,

    Drew

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  • Jerry PadillaBusiness Member
    Lender · Rochester, NY · Member since 2014 · 3k+ posts · 1k+ votes
    10y

    @Drew Sukovich

    Welcome to the site! This is a great place to learn from others and educate yourself. One idea, is a cash out refinance on your primary residence. Rates are low and you can get in at a fixed rate for a long term plan as a buy and hold investor. This chunk of money can then be used to purchase several income producing properties. 

    Here is some more info on cash out financing;

    A cash out refinance is exactly what it sounds like. It is when you refinance your property and pull money out. pull money out of a property. The mortgage can either be paid off free and clear or can have enough equity in the property to make it worth refinancing and pulling money out. Cash out refinances are available on primary and investment properties.

    • The typical cash out financing is done after 6 months of owning the property, based on ARV and available for mortgages #1-4. Please see delayed financing for less than 6 months after closing.
    • On a primary residence you can pull out up to 80% LTV on a SFR and up to 75% LTV on 2-4 unit multi-families.
    • On an investment property; A SFR if you have #1-4 mortgages you can pull out up to 75% of the equity and a 2-4 unit MFR is up to 70% equity.
    • On an investment property; If you have #5-10 mortgages you can only pull out money in the first 6 months (delayed financing) that you own the property, if you didn't originally get a mortgage on the property. As long as the value is there (on a SFR 70% LTV and 2-4 unit 65% LTV) You can take out up to the purchase price plus closing costs on the property.
    • If you are willing to pay the fees and go through two closings.... You can take out private or hard money on free and clear properties #5-10 and do a rate and term refinance with conventional to pull money out on them.
    • PROPERTIES LISTED FOR SALE
      For a rate and term refinance transaction, the borrower must evidence that the listing has been cancelled, and must not have been listed for sale as of the date of the application.
      For a cash-out transaction, the borrower must provide evidence that the listing was cancelled at least six months prior to the date of application.
    • Cash Reserves Required For Other Properties Owned by Investor;
      • If the borrower has 1-4 mortgages, an additional two (2) months for every other SFR investment property and second home is required and additional six (6) months for every other 2-4 unit investment property and second home
      • If the borrower has 5-10 mortgages, An additional six (6) months for every other investment property and second home.
    [email protected]585-204-6923
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  • Jo-Ann LapinPro Member
    Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
    10y

    Welcome Drew. Happy to connect.

    [email protected]
    0Reply
  • Ed LeGrand
    Investment Property Specialist · Santa Clara, CA · Member since 2015 · 90 posts · 16 votes
    10y

    Welcome to BP Drew and Happy New Year.

    0Reply
  • Scott Wolf
    Flipper/Rehabber · Chico, CA · Member since 2015 · 26 posts · 11 votes
    10y

    Welcome, Drew! I live in Chico and have rentals here and in Paradise and Oroville, so far. Chico is a fantastic place to live, no question about that. If you're looking at buy and hold rentals, the cashflow is better in Paradise and Oroville and further afield in Corning and Red Bluff. Properties are cheaper in all those places than in Chico, and although the rents are lower, they are not enough less so as to offset the much lower cost of property. My $.02 worth. I'd love to get together when you're in town sometime. 

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  • Drew Sukovich
    OP
    Martinez, CA · Member since 2015 · 5 posts · 0 votes
    10y
    Originally posted by @Scott Wolf:

    Welcome, Drew! I live in Chico and have rentals here and in Paradise and Oroville, so far. Chico is a fantastic place to live, no question about that. If you're looking at buy and hold rentals, the cashflow is better in Paradise and Oroville and further afield in Corning and Red Bluff. Properties are cheaper in all those places than in Chico, and although the rents are lower, they are not enough less so as to offset the much lower cost of property. My $.02 worth. I'd love to get together when you're in town sometime. 

    Thanks for the welcome Scott.  I plan on being in the Chico area sometime during the next couple of weeks for a full day of information gathering most likely on a Saturday.  I would enjoy meeting with you to chat about Chico and Butte county real estate investing.  I'll contact you directly and let you know my plans and if your schedule permits it would be great to have lunch and talk.  Happy to pay for your lunch!

    Cheers,

    Drew

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  • Scott Wolf
    Flipper/Rehabber · Chico, CA · Member since 2015 · 26 posts · 11 votes
    10y

    Drew,

    Would be happy to get together. Just call or email when you get a handle on when you're likely to head this way. Looking forward to it! 

    0Reply
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