REI Newbie from SF Bay Area

4 Replies

Hello Everyone, 

I am a newbie to both biggerpockets & the world of REI! I accidentally ventured into REI when we bought a new home in North Cal / Bay Area, and rented out the previous one. I feel it has worked out due to pure luck (appreciation wise), even though it has a neutral to slightly -ve cashflow. Now that I am thinking of buying an investment property for cash flow, I feel I need a much deeper understanding of the domain. I have started reading up as much as I can from the biggerpockets forums, listening to podcasts, and currently reading "Rental Property Investing by Brandon Turner".

Looking for some advice around:

1) What are the cities I should be looking into? I am unable to make the math work for properties in CA at this point.

2) Once cities are shortlisted, how do I find the right properties? I am currently using Redfin/Zillow for finding Multifamily properties. Is this the right way to go?

3) The book talks about buying a property for 20% discount, and by adding 5% it should appreciate by 10% in 1 yr. Further, every unit should have $200 cashflow. Is this followed to the letter and/or possible in this market? I am biased by North Cal markets obviously.

4) How do I create a team or build those connections so that I can invest and manage from a remote location?

5) And many more...

Any suggestion/advice/comment would really help me get started on my journey as I continue to accumulate knowledge in this area.

Welcome to BP! I recommend that you check out the event listings and/or hop on Meetup to find local REI meetups to attend. There are quite a few groups that meet regularly all over the Bay Area (I'm pretty sure there is a popular one in the south bay), and many are focused on investing out of state. You'll gain a wealth of information networking with those folks.

Happy investing!

Hey Sayantan! To answer your questions:

1) What are the cities I should be looking into? I am unable to make the math work for properties in CA at this point.

It really depends on your budget, what you're looking for, etc. Certain cities will cash flow, others won't. Some cities are better for MFRs, some are better for SFRs. Some are urban, some are suburban, etc. Happy to help on this front, as all I do is out-of-state stuff from CA, but would need to more of what you are looking for. One of the best things to do is see in the forums where other people are investing and use those as starting points for curiosity.

2) Once cities are shortlisted, how do I find the right properties? I am currently using Redfin/Zillow for finding Multifamily properties. Is this the right way to go?

It's an okay starting point for getting a feel for what might be out there. But relying on either of those to tell you the truth about a property is dangerous. Networking will be key for finding properties out-of-state. You need humans involved in the equation to get the more accurate picture.

3) The book talks about buying a property for 20% discount, and by adding 5% it should appreciate by 10% in 1 yr. Further, every unit should have $200 cashflow. Is this followed to the letter and/or possible in this market? I am biased by North Cal markets obviously.

Anything involving appreciating is speculation, for starters. Then, 20% can be a great discount on a property but you could miss out on perfectly good properties that don't quite fit that. Then for $200 cash flow, that is 100% dependent on what price you are paying for the property and what condition it's in. If the property costs $2M, then $200/month is a horrible return. Or if you buy a super-risky property, $200/month isn't enough in my opinion. I know of perfectly good turnkey rent-ready properties that yield $400/month after all expenses. So, no, $200 shouldn't be a hard number. It's more about calculating your return. Try these-

https://www.biggerpockets.com/renewsblog/2013/01/1...

4) How do I create a team or build those connections so that I can invest and manage from a remote location?

Networking. And it depends on how you want to do it. You can do the DIY route, at which point I'd say- network. Or you can go the turnkey route, at which point those are easier to find groups at once.

https://www.biggerpockets.com/renewsblog/2012/12/2...

5) And many more...

Ask anytime!

Originally posted by @Sayantan Satpati :

Hello Everyone, 

I am a newbie to both biggerpockets & the world of REI! I accidentally ventured into REI when we bought a new home in North Cal / Bay Area, and rented out the previous one. I feel it has worked out due to pure luck (appreciation wise), even though it has a neutral to slightly -ve cashflow. Now that I am thinking of buying an investment property for cash flow, I feel I need a much deeper understanding of the domain. I have started reading up as much as I can from the biggerpockets forums, listening to podcasts, and currently reading "Rental Property Investing by Brandon Turner".

Looking for some advice around:

1) What are the cities I should be looking into? I am unable to make the math work for properties in CA at this point.

2) Once cities are shortlisted, how do I find the right properties? I am currently using Redfin/Zillow for finding Multifamily properties. Is this the right way to go?

3) The book talks about buying a property for 20% discount, and by adding 5% it should appreciate by 10% in 1 yr. Further, every unit should have $200 cashflow. Is this followed to the letter and/or possible in this market? I am biased by North Cal markets obviously.

4) How do I create a team or build those connections so that I can invest and manage from a remote location?

5) And many more...

Any suggestion/advice/comment would really help me get started on my journey as I continue to accumulate knowledge in this area.

 Welcome to the site Sayantan.

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