Starting my REI adventure with a duplex in San Francisco Bay Area
Howdy everyone!
Long time lurker, first time poster here! For the past year, whenever I Googled something about REI BP would inevitably come up, but I finally made an account!
Since last spring '15 I was looking to buy a place to live in SF. The plan was to buy a house for myself, and then in a year or two look for an investment property in a cheaper city. In March, after 90+ open houses, I closed on a duplex in the Inner Sunset -- I figured why not get both the house to live in and an investment property in one shot!
I had this REI master plan to, every few years for the next 15 years, save money for a down payment, get bank financing, and then buy an investment property.
Well, the duplex I bought needed some work, as it had "deferred maintenance". And that rehab is taking longer (ie, still not done!) and costing more than I anticipated (ie, cutting into those future investment funds). I was getting bummed out.
In the meantime, having finally bought my first place, I was now hungry for more. I started learning as much as I could. I read about the 10x rule in one of @Brandon Turner's books, and it was a lightbulb moment for me! No longer was I content to follow the conservative 'save, save, save for years --> conventional financing' route. I was going to look at the renovations not as an expense, but as value creation, as future equity that I could tap into.
My current plan is:
- (a) Finish the rehab, increase value of the house
- (b) Tap into the equity from (a) to help finance the addition of a legal unit in the garage
- (c) Tap into the equity from (b) to help finance more real estate investments
Not sure exactly what (c) will be. I'm leaning towards small multi-family. But I have some time to figure that out! Until then, I'm here to read, listen, network, catch up on BP podcasts, go to @J. Martin's meetups (went to my first one on Thursday!), go to Johnson H's meetups, and just talk shop with all of y'all!
- Harman