First Post! From San Francisco, CA by Way of Alabama

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First Post! From San Francisco, CA by Way of Alabama

Chris Thomas
Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes

Hello Everyone,

My name is Chris Thomas and I currently live in San Francisco California. I’m a Producer for a large video game publishing company in the North Bay. I’ve been in the industry for 16 years, working at companies like LucasArts, Disney, and 2K Games. To be perfectly honest, I’ve been very lucky in my career and could easily see myself working in games for the rest of my life. That brings me to investing. While I love my job, I’m getting to the point where controlling my destiny and having financial freedom is more important to me.

I’ve always been fairly interested in Real Estate. When I was young my father always talked about getting into that world but never truly pulled the trigger. He went to some seminars and probably blew some money on getting guru type help but it ultimately didn’t go anywhere.

I’m very early on my journey to purchasing my first property. So far, I’ve created a separate account which syphons off 20% of my monthly income to save for my first down payment. In the meantime, I’ve been reading The Book on Rental Property Investing, listening to all the podcasts on BiggerPockets, and casually strategizing with friends and family.

My short term goal is to buy a quad, get my hands dirty and then once I feel comfortable, start scaling up. Unfortunately, the Bay Area is a good bit out of my price range…like it is for many people. I’m toying with the idea of investing in Alabama where I grew up. My mother and brother still live there and I think could help. I haven’t started running the numbers on deals there yet but plan to start soon (I haven’t fully grasped how to run all the numbers yet…but I’m getting there).

In a perfect world, I'd be able to afford a duplex or quad in this area (near work) so I could live in one of the units and rent the rest. However, even with FHA rates, that type of property is too high for me right now…at least I think it is.

Anyway, that was kind of longwinded…but that’s where I am. I know I have a long way to go but I’m determined to make it happen as soon as I can.

Chris Thomas

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Christine M.
Investor · San Francisco, CA · Member since 2015 · 16 posts · 8 votes
10y
That's a good start, Chris. I also just returned from Birmingham. I was there to meet with turnkey providers for my first rental property. I like the city a lot and the food is great!
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  • Tony Butler
    Investor · Madison, AL · Member since 2016 · 8 posts · 6 votes
    10y

    Hi Chris,

    Do you have a city in Alabama in mind?  Do you have a budget or amount in mind for your down payment?  I live in Bama and I'd be happy to keep my eyes open for a multi family, duplex, condo, apartment for you.

    Thank you,

    Tony Butler

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  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    Hey Tony! 

    Thanks for the reply. I feel like I need to do some more research before I have a solid number in mind.  If I had to ballpark, I'm aiming to save 15-25k for a down payment. Of course, I know there's probably opportunities out there to get into the market before having that much saved. 

    My family is in Irondale and I know the surrounding Birmingham areas really well. That would probably be my confront zone to start out, however, I'm open to any other areas/suggestions to take a look at. 

    Thanks again! 

    Chris Thomas

    1Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    10y

    For many reasons, I would suggest not buying a "quad".

    Based on your post, I would suggest starting by (1) creating a net worth spreadsheet for yourself then (2) drafting a SMART (Specific, Measurable, Attainable, Relevant and Timely) real estate investment goal and, if necessary, breaking that down into sub annual goals and monthly goals, then (3) reading every real estate investing book you can get your hands on (if you need a list, let me know) and attending local investor group meetings to gain a base level of knowledge.

    I wish you the best.

    -jon.

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  • Christine M.
    Investor · San Francisco, CA · Member since 2015 · 16 posts · 8 votes
    10y
    That's a good start, Chris. I also just returned from Birmingham. I was there to meet with turnkey providers for my first rental property. I like the city a lot and the food is great!
    1Reply
  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    @Jon Q. Thank you for the advice! Do you think something smaller like a single family or duplex is smarter for a first time investor? 

    @Jack Eyer Thanks! I'll keep that in mind. I haven't really looked into Turn Keys too much but I'll do some research. 

    @Christine M. The food is pretty great! There's lots of new, cool places popping up in Birmingham. If you're heading back, let me know, I'm sure I can throw you some good recommendations. How did the the meetings go? Is turnkey the way you're going?  

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    10y
    Originally posted by @Chris Thomas:

    @Jon Q. Thank you for the advice! Do you think something smaller like a single family or duplex is smarter for a first time investor? 

    @Jack Eyer Thanks! I'll keep that in mind. I haven't really looked into Turn Keys too much but I'll do some research. 

    @Christine M. The food is pretty great! There's lots of new, cool places popping up in Birmingham. If you're heading back, let me know, I'm sure I can throw you some good recommendations. How did the the meetings go? Is turnkey the way you're going?  

     Single Family. The reason is it will be the housing structure, assuming you locate the right property in a decent location, that you will have the best chance of attracting a high-quality long-term tenant.

    Think about preferred housing structures and it's obvious.  Most go into multis to gain economies of scale at sacrifice of tenant quality.  In the middle sized complexes you don't accomplish either.

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  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    Makes sense. Thanks again! I guess a single family may be easier to juggle until I'm more seasoned. 

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  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    10y

    Are you planning a move to Alabama, Chris?  Or just considering the opportunities for real estate investing in the state?  

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  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    Not planning to move. I grew up there there until I was 19 and then moved to SF. Been out here in the Bay Area now for over 16 years. I'd like to invest in property closer to where I currently live but because of the high entry price out here I'm looking to other markets. The only reason I'm considering Alabama is because I at least know something about the area and go back once a year or so to visit family. 

    I'm also thinking about Sacramento, but again...the price of entry may be too high if I want to get started sooner rather than later. 

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  • Chris Kirk
    Property Manager · Sacramento, CA · Member since 2016 · 91 posts · 34 votes
    10y

    Hi @Chris Thomas! Welcome to BP. That sounds like you have some great goals ahead of you. Love the detailed intro. I don't have any experience with Alabama, but I'm sure there are some great opportunities there.

    I'd recommend checking out some of the meetups to connect with people. There's some in the Bay Area. Pretty fun to go and just hear about other peoples experience, and there's plenty of ones that don't charge anything.

    As for Sacramento, I think that is a great opportunity as well. We actually just wrote a blog post about why Sacramento is a great market (it's probably more on the fun than the analytical side). I don't think I can link here but let me know if you want to read it and I can send it over! As for the price of entry, it may be harder to find a property in your price range that can meet your criteria but there are definitely some opportunities out there. I'd just keep your eyes open, it's always fun to look around for properties. You can also try connecting with wholesalers or off market realtors.

    Cheers and welcome to BP!

    PS: Love that you work in games, I actually used to work at Zynga some time ago.

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  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    10y

    I think you will find SF is a much tougher market for lower priced homes. I am amazed at the Multi $100K prices the "Flip" TV shows show as entry points.  All to make $30K to $50k.  I understand how a market sets the price, but I am super happy keeping my risk much lower and have the same profit potential.

    Most of what I buy in Alabama are $50K to $125K.  I have a minimum net goal of $25K I look for in properties, and have had great success with that goal in Birmingham and Huntsville markets over the last 10 years or so.  There is a lot of growth out I-20 if you still visit Irondale.  Also south of Hoover in Pelham, Helena, and Alabaster I have found good projects. 

    Hoover is still a hot market. Bought an extensive rehab for $90K last year and was quite surprised it brought $220K about six months later. Considerable rehab, but a payday to be proud of.  Those deals are out there.

    Feel free to touch base is you would like some more info on certain areas.  I am actively buying too and would not mind sharing what new information I am finding.  There are also investment clubs and blogs for the Birmingham market you can use to find something in this area. 

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  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    That's awesome! Some of my closest friends worked at Zynga for years. Most of us came from LucasArts back in the early 2000s. 

    I actually have a friend who lives in Sac who is interested in partnering with me. She's owned a property already (just sold it) in San Diego so together we may be in a decent position to get into the market up there. I'd love to read the blog post if you don't mind sending it over! 

    And thanks for the welcome! 

    Chris

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  • Chris Thomas
    OP
    Video Game Producer · San Francisco, CA · Member since 2016 · 25 posts · 3 votes
    10y

    Thank you Sharif! I'll definitely check them out if I move forward in the area. Are they based in any particular city in AL? 

    0Reply
  • Marquell Jones
    Investor · Helena, AL · Member since 2016 · 133 posts · 12 votes
    10y

    I have a guy in Alabama that have about 20 properties for sale, some section 8 but generate a $750+ a month. I'm building capital myself, so I could find you something here in Birmingham too. Let me know.

    0Reply
  • Leila Lewis
    Real Estate Investor · Birmingham, AL · Member since 2016 · 15 posts · 1 vote
    10y

    Welcome to BP, I have only been a member for a few days, but I'm in Birmingham, if there is anything that I can help you with let me know.

    I'm new to real estate investing, but ready to jump in. Best wishes to you.

    0Reply
  • Al Williamson
    Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
    10y

    hey @Chris Thomas I was born in Mobile but raised in Sacramento.

    Hopefully I can bump into you at the SF Bay Summit this weekend.

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  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 263 posts · 230 votes
    10y

    Hey Chris, welcome to BP!

    I've been following a similar strategy for a few years now. I have a vacation rental and a duplex that I live in one side and rent the other here in CA, but bought my first SFR in Birmingham earlier in the year. I also grew up there and still have family there that is helping to manage the property for me. The price of entry is definitely a lot lower in bhm, but personally I feel like getting a mortgage on a 40-50k house is more hassle and expense than it's worth. We saved and saved for down payments for loans on our California properties, but then used the cashflow from those to purchase our bhm property cash. We bought fixers here where we live, but decided to go pretty turnkey in Alabama so that we didn't have to either stick around while fixing it up and trying to place a tenant or make my dad do that.

    Anyway, all that to say there are pros and cons to each market. I personally like have properties in both! Good luck to you and let me know if I can help you in any way!

    PS- my favorite part about having property in Birmingham is the tax write off for all my travel expenses when I go see my family/check on my property every year! Makes that absurd plane ticket price a little easier to stomach.

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  • Sharif Haleem
    Wholesaler · Birmingham, AL · Member since 2016 · 26 posts · 9 votes
    10y

    They're based out of Birmingham. Also, if you're looking to flip in the area let's stay connected. I know the market very well. It is a great place to start.

     I would love to provide property management for your properties at a discounted monthly rate of 7%

    0Reply
  • Brad Sanford
    Investor · Harvest, AL · Member since 2014 · 29 posts · 9 votes
    10y

    Hi Shelby.  Several thoughts in common.

    Travel works the same way "from" Birmingham. I ski with my family, so I have interests in rentals in Colorado and Montana. I am partners in these ventures, but I still need to take some mandatory time each year to check on them, have LLC meetings, and schedule routine maintenance. I actually am looking at selling my occupied rentals in Huntsville market to concentrate more in Birmingham area and OB-GS. The expenses to travel to Huntsville are still deductible, but the time it is beginning to take is not near as attractive as the seasonal opportunities. No rule that you cant have a good time on the front or end of a work trip.

    And I agree, $40K to $50K investor loans can be more difficult than big notes. But my experience in this area is those type of properties produce greater Percentage Returns than larger properties. I normally try to net $25k on a property, and have been pretty successful at that over the years. A good way to approach those deals is to develop a small group of $10K investors (more or less). Many quality people with this amount are looking for good annualized returns (we pay 10%APR), but don't want multiyear CD's and such to get that. So we usually do up to 12 month notes, maximum term . A lot of the crowd funding sites don't operate in Alabama yet, so there is a lot of room for individuals who can find a way to work together on these lower price opportunities.

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  • Sharif Haleem
    Wholesaler · Birmingham, AL · Member since 2016 · 26 posts · 9 votes
    10y
    Originally posted by @Chris Thomas:

    Thank you Sharif! I'll definitely check them out if I move forward in the area. Are they based in any particular city in AL? 

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  • Sharif Haleem
    Wholesaler · Birmingham, AL · Member since 2016 · 26 posts · 9 votes
    10y

    They operate statewide

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  • Glen West
    Investor · Harvest, AL · Member since 2015 · 12 posts · 2 votes
    10y

    Hi Brad - let me know if you decide to sell any of your occupied rentals in the Huntsville market if they're SFR. I'm looking to buy and have several friends who want to partner and invest here, so I'd be interested in seeing what you have.

    Thanks,

    Glen

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  • AJ Cole
    Investor · Huntsville, AL · Member since 2017 · 18 posts · 14 votes
    9y

    @Chris Thomas @Christine M. @Shelby Pracht

    I am a full-time real estate investor in my hometown of Huntsville, Alabama that is actively:

    1. Buy & Hold.

    2. Fix & Flip.

    3. Sell Off Market, Turkey & Wholesale-to-Turnkey Properties

    I work with a lot of other investors (in and out-of-sate) who are looking to grow their real estate portfolio with "Turnkey" and "Wholesale-to-Turnkey" properties.

    Be happy to connect with you and keep you in the loop of what we have available.

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