New Investor based in San Luis Obispo County, California

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New Investor based in San Luis Obispo County, California

Sander A Swenson
San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes

My name is Sander Swenson, I am largely new when it comes to investing in real estate, but my father has been a property manager in the Bay Area since I can remember. I've been around Real Estate my entire life because of this. At the moment I am working towards my real estate agent license in CA and otherwise going to college in San Luis Obispo, CA. I've been researching real estate like mad for the past year or so, having already chewed my way through some of the more popular real estate books. I found bigger pockets through the podcast, of course.

As far as real estate philosophy goes; I want a steady form of income doing something outside of 'working for the man' so that I can be comfortable no matter the job state. Largely, that equates to income for me in the short term. Long term, I want to be as recession-proof as possible and own a couple of doors outright before I turn 50.

For a first step: I am hoping to buy a small multiplex that needs some maintenance to rent out to students, and ideally, live in one unit. From what I've seen around here there are a few multiplexes that are basically just homes with walls through the living room, making one 2 bed and one 1 bed unit on the property. Basically, I want to live somewhere for 'free'.

After this, I hope to have some amount of income to direct to a Solo 401k and invest in notes. The idea of being paid to own a piece of paper that says a property is mine, then the possibility of re-acquiring that house for in the case of foreclosure just tickles me. And otherwise just invest in multiplexes in the long term afterward. The aim is to use a 1031 exchange to move up to, eventually, a 15 door property so that the day to day can be handled by an on-site manager, and I am able to allot my time wherever I deem necessary (probably more real estate).

Hopefully, that was all clear. If any of you have a moment, I have a few questions as well:

Where in the broadly pacific coast would be your opportune place to invest for cash flow?

How do you do your dd for a state or city before deciding to invest in it?

What do you do, rather than rent out properties, when renting is just not a good option for a location?

What do you do to invest when the housing market begins to fall or level out?

Thank you all for your time and dedication to this wonderful forum, I hope I will one day be able to contribute even half as much as some of you already have. 

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Most Popular Reply

Tim KunzPro Member
Contractor · Sacramento, CA · Member since 2015 · 131 posts · 55 votes
7y

@Sander A Swenson welcome to BP, this is great place to be. You have some solid goals laid out.

1) As you've probably heard and seen through your research California is a tough place to cash flow in general and especially the coastal areas with housing prices, your best bet would be multi family units with deferred maintenance or get creative with an SFR to make the numbers work in terms of cash flow.

2). @Ben Tilbury pretty much summed it up on this one

3). You really need to get creative here and think outside of the box AND have an exit strategy in place before buying. In terms of long term hold properties you can look to STR, corporate housing, renting out garages as storage, etc. I know people who have considering renting a car out with there AirBNB as a package deal. These all require substantially more work but can increase cash flow. There's a good investment summit this weekend in Oakland put on by @J. Martin he and @Al Williamson are experts on these investments (Event Link: SF Bay Summit or Bigger Pockets Event Link). The CEO of Bigger Pockets will be speaking as well which will be cool to hear.

4). There's a ton of thought on this but nobody knows when/why/how bad/etc. about the next recession so it shouldn't affect your current investment strategies.  Buy right, like Ben said be prepared to buy low when it does happen, and possibly look to invest in areas less prone to market corrections (ie. midwest markets)

Welcome to the community down here, I'm actually working with Ben on a project right now.  I'd love to meet up sometime and talk real estate and goals in general, always good to network with like minded people.

Cheers

Tim

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  • Charles Carillo
    Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
    7y

    Hi Sander, 

    PM me, I will connect you with one of my partners in your backyard.

    1Reply
  • Ben Tilbury
    Real Estate Agent · San Luis Obispo, CA · Member since 2015 · 100 posts · 38 votes
    7y

    @Sander A Swenson Welcome to the BP family! Where in the Bay Area are you from? You remind me of myself about 4 years ago, I’m also a licensed agent here in SLO specializing in investment properties whether it be residential or commercial. I’d be happy to grab some coffee or lunch sometime if you’d like to discuss more but I’ll try to answer a few of your questions although realize this is just my opinion and I’m sure someone else will have a completely different view point. That’s one piece of advice I did receive when it comes to real estate everyone got a different opinion so if you try to follow everyone’s opinion and advice you’ll go nowhere. So my recommendation is find a mentor that coincides with your goals and who’s readily available to answer questions you may have but also think about what value you can bring to them. 

    1.) Where in the broadly pacific coast would be your opportune place to invest for cash flow? You’ll get 100 different answers like invest somewhere cheaper but I believe and was taught invest in your own backyard. On Foothill there are some new apartments that charge up to 1200-1600/room so that tells me if I have a nicer or similar rental product and rent it to college students I too can get someone near that. Right off the bat you’re thinking that’s impossible but if you have a newly renovated 4 bedroom home with shared bedrooms (two beds 🛌 🛌) in each and charge 600-650 you’re almost at that high market rate. Plus there are deals all over you just have to know where to look so if you buy right that would be a better cash flowing property than somewhere even in another state.

    2.) How do you do your dd for a state or city before deciding to invest in it? Go there. Google. Go on the cities website. Check what large companies are located there. Call brokers and as for the most desirable areas to own rentals. Research their colleges and student rental options. Build a team and have boots on the ground. This is harder to do just starting out because you really have to partner with people you can trust yet there are lots of crooks out there so be weary.

    3.) What do you do, rather than rent out properties, when renting is just not a good option for a location? I’m not sure I understand this question right, I wouldn’t invest in a market that didn’t have a rental market or high vancany rates. I’m not even sure a place like that exists though since everyone needs housing but there are obviously better markets than others. Simply put, don’t invest in a ****** market that you don’t understand unless you have some insider knowledge that you’re investing directly in the path of progress and then still think twice about investing there...

    4.) What do you do to invest when the housing market begins to fall or level out? I think you’re referring to another housing shift such as the recession or just the cyclical market which is inevitable, if you have cash reserves this can be the best time to buy! Although lending regulations and money tighten up and is harder to come by. But when people start losing their houses to foreclosure guess what? They turn to renting. So it’s a win win for you if you’re ready for it.

    I hope that was semi helpful. Just my two cents. 😎🤙🏻 

    1Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    Wow! I didn't expect responses from people so close to home so quickly!

    @Charles Carillo, I've PM'd you and I can't wait to connect!

    @Ben Tillbury, I'm from the Walnut Creek area actually, more towards Dublin/San Ramon if you know the cities. Coffee would be amazing, I'll PM you. Thank you for answering all of my questions with such detail, I especially enjoy the room sharing plan. I am really looking forward to talking with you in person!

    Honestly, to think that I have been a part of BP for less than 24 hours just baffles me. I'm speechless.

    1Reply
  • Tim KunzPro Member
    Contractor · Sacramento, CA · Member since 2015 · 131 posts · 55 votes
    7y

    @Sander A Swenson welcome to BP, this is great place to be. You have some solid goals laid out.

    1) As you've probably heard and seen through your research California is a tough place to cash flow in general and especially the coastal areas with housing prices, your best bet would be multi family units with deferred maintenance or get creative with an SFR to make the numbers work in terms of cash flow.

    2). @Ben Tilbury pretty much summed it up on this one

    3). You really need to get creative here and think outside of the box AND have an exit strategy in place before buying. In terms of long term hold properties you can look to STR, corporate housing, renting out garages as storage, etc. I know people who have considering renting a car out with there AirBNB as a package deal. These all require substantially more work but can increase cash flow. There's a good investment summit this weekend in Oakland put on by @J. Martin he and @Al Williamson are experts on these investments (Event Link: SF Bay Summit or Bigger Pockets Event Link). The CEO of Bigger Pockets will be speaking as well which will be cool to hear.

    4). There's a ton of thought on this but nobody knows when/why/how bad/etc. about the next recession so it shouldn't affect your current investment strategies.  Buy right, like Ben said be prepared to buy low when it does happen, and possibly look to invest in areas less prone to market corrections (ie. midwest markets)

    Welcome to the community down here, I'm actually working with Ben on a project right now.  I'd love to meet up sometime and talk real estate and goals in general, always good to network with like minded people.

    Cheers

    Tim

    4Reply
  • Ben Tilbury
    Real Estate Agent · San Luis Obispo, CA · Member since 2015 · 100 posts · 38 votes
    7y

    I like @Tim Kunz’s insights. If you buy right it doesn’t matter what market you are in and always have multiple exist strategies because sometimes things can go not as planned. I find a lot of real estate is just problem solving, if you’re flexible and creative with your problem solving you’ll get through the tough deals and the tough times. Also don’t get emotionally attached to a property. Maybe you, Tim and I can meet next week depending on your schedules? 

    2Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    @Tim Kunz Thanks!

    Yea, in CA it seems hard to swing decent cash flow. Either I haven't been looking long enough, or I think I'm looking in the wrong place for multiplexes with obvious repairs needed. I love the idea of using an SFR and renting out rooms/AirBnB, renting out garages, etc so I'll keep a closer eye on those ideas. As far as recessions, I'll invest right as best as I can. I have been trying to find ways to get out without losing too much if a deal goes sideways. I suppose that falls into the idea of multiple exit strategies.

    @Ben Tilbury I'd love to meet both of you this next week. I'll contact Ben this evening and we will set something up off of BP.

    0Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    7y

    @Sander A Swenson, 
    Welcome. I grew up in Nipomo, just south of you. I bought some stuff in the SF Bay during the financial crisis, but am investing in Multifamily (apartment) syndications out of state right now - with a focus on Phoenix. And have a short term rental business also. 

    As @Tim Kunz, I'm busy with the Summit right now. But I'll try to hop on to BP more to give some feedback! Welcome to BP Sander! :) 

    1Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    @J. Martin Thanks for the welcome! Congrats on being poised to profit from 2008, and Phoenix seems like quite the hotspot. I hope the summits go well this weekend, unfortunately, I'm going to have to stick to my local RE group to network for the time being. I'm looking forward to the feedback!

    0Reply
  • Ryan RomingerBusiness Member
    Real Estate Broker · Indianapolis, IN · Member since 2018 · 340 posts · 144 votes
    7y

    @Sander A Swenson

    Small world! I am originally from the Fresno area (Visalia) and my parents now live on the central coast (Arroyo Grande). SLO is one of my favorite places. I had lots of HS friends that went to Cal Poly.

    Now I’m a RE broker and Property Manager in Indianapolis and I specialize in helping investors. I’d love to connect and learn more about what your goals are for investing.

    [email protected]317-935-0075
    Intrigue Real Estate & Property Management4.6272 Reviews
    WebsiteView Page
    2Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    @Ryan Rominger Wonderful! It's so nice to see so many locals connecting here. I've sent you a connection request and we can talk about meeting there.

    Also, as it stands I've just recently put to words what my first goal of real estate is: To own enough properties, outright, that I do not necessarily need to work for a living any longer. (Read: ~3-4 SFH rentals or some cashflow equivalent, enough that my rentals bring in a livable monthly salary.) After that, all I do in Real Estate is just for enjoyment.

    1Reply
  • Will Mace
    Investor · Castle Rock, CO · Member since 2017 · 27 posts · 29 votes
    7y

    @Sander A Swenson....as you are quickly finding you have found a great resource in BP. SLO is in my back yard. My family had property in SLO & Paso Robles (wine country). Love SLO's Farmers Market!! We do not currently have any investments in SLO but I imagine the buy-in is high and margins are slim. Since the early 2000's it's been a strong college/post-college market. Not as high-cost-of-entry as Isla Vista in Santa Barbara, but likely not far off.

    Have you considered syndicating a deal with other like minded investors to buy into a larger complex/development? 

    2Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    @Will Mace Absolutely! The farmers market is really something, that's for sure. You are correct, the margins are incredibly slim; which is why I've been looking in Santa Maria most recently at the suggestion of @T.J. Ferguson.

    I have considered some kind of partnership, and my father has expressed interest in working with me on my first deal. In the future, I feel a partnership can be advantageous, especially where the terms are other than equity stakes for the time being.

    0Reply
  • George Blower
    Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
    7y

    @Sander A Swenson

    Welcome to BP.
    @Sander A Swenson

    0Reply
  • Danny Hutchinson
    Investor/Real Estate Agent · Santa Maria, CA · Member since 2015 · 19 posts · 3 votes
    7y

    Welcome to the community! I’m an RE agent/investor in Santa Maria. I’ve got a flip that’s getting finished with an opportunity for another after this one so yes, they are slim but out there. PM me and we can get you down here to take a look at these projects and discuss your plans. Let me know if I can help.

    2Reply
  • Ryan RomingerBusiness Member
    Real Estate Broker · Indianapolis, IN · Member since 2018 · 340 posts · 144 votes
    7y

    @Sander A Swenson

    That’s a great goal to have, and definitely an achievable one if you make the right investments.

    Connection request accepted! I look forward to speaking further and learning how we might be able to work together.

    [email protected]317-935-0075
    Intrigue Real Estate & Property Management4.6272 Reviews
    WebsiteView Page
    1Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    @George Blower Thanks!

    @Danny Hutchinson Thanks as well! I'd love to look around active sites and see what could be done/why you chose what. I'll PM you.

    @Ryan Rominger Awesome. Hopefully, we will be able to meet soon.

    1Reply
  • Owen SchwaegerlePro Member
    Real Estate Broker · San Luis Obispo, CA · Member since 2016 · 181 posts · 69 votes
    7y

    @Sander A Swenson, investing in multifamily rentals is definitely the way to go! I have a few leads on some off market rentals 3-4 units in San Luis Obispo and Arroyo Grande. Would love to connect with you and learn more!

    I grew up in Pleasanton in the Bay Area and now live in SLO and do real estate full time here. Used to work for 'the man' and had a regular 8-5pm job that drained my soul. Now I am doing real estate, managing property and investing and loving it!

    Would love to get together with you for coffee sometime soon!

    1Reply
  • Colin Princi
    San Luis Obispo, CA · Member since 2016 · 17 posts · 6 votes
    7y

    @Sander A Swenson - been in SLO for the past 10+ years.  Still an "amateur" but just closed on our second multifamily property (duplex in Los Osos).  Also have a multi-house property in Atascadero.  Hit me up if you have any questions, always looking to make new connections.

    0Reply
  • Gina Watkins
    Arroyo Grande, CA · Member since 2016 · 11 posts · 4 votes
    7y

    Hi, I'm an investor in Grover Beach. I own 2 small houses and a duplex in Taft. I also invested in a project building condos in Atascadero. I'm looking to do more investing, but of course it's hard in this area. I've been considering possibly getting a turn-key in another state. I'm also looking for pre-foreclosure deals. My husband recently became a real estate agent in Pismo at Bond RE Group. 

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y

    Welcome Sander!

    0Reply
  • Sander A Swenson
    OP
    San Luis Obispo, CA · Member since 2019 · 8 posts · 7 votes
    7y

    Oh dear, I should really check this more often. Thank you all for your welcomes!

    @Owen Schwaegerle That's wonderful! I've been looking to find someone who has more deals than just the MLS, I'm interested to learn. How did you find these deals if you don't mind me asking? It's always such a small world, isn't it! It seems like every other person I've met on BP is from the Bay. I'm trying my best to avoid the mandatory 9-5 after graduating, so I feel you there.

    @Colin Princi I know the feeling, haven't closed anything just yet, but I feel like I will never learn enough no matter what I do. I'm jealous that you found something nice in Los Osos, it seems closer to SLO than AG for some reason...

    @Gina Watkins Hello! What do you feel has been more rewarding by the way? The houses or the Duplex? It is extremely expensive around SLO for sure, but I've stayed away from turn-keys just because I don't know if I can handle being so far away from my asset, ya know? Do you happen to know if there are RE groups meeting, networking events, etc around here?

    @Ali Boone Thanks! I love the name of the Investment group... "Hipster Investments"

    Thanks again for bearing with the response time, all!

    1Reply
  • Gina Watkins
    Arroyo Grande, CA · Member since 2016 · 11 posts · 4 votes
    7y

    Hi! As far as the duplex vs. The houses, I cant say since they are adjacent, built at the same time, and purchased at the same time.

    As far as networking groups, yes there is one in Pismo Beach and one in Santa Maria every month.

    Apparently, I cant post the specifics of the meetings here but, I will try to send them in a direct message to you.  

    2Reply
  • Gina Watkins
    Arroyo Grande, CA · Member since 2016 · 11 posts · 4 votes
    7y

    Hi! As far as the duplex vs. The houses, I cant say since they are adjacent, built at the same time, and purchased at the same time.

    As far as networking groups, yes there is one in Pismo Beach and one in Santa Maria every month.

    Apparently, I cant post the specifics of the meetings here but, I will try to send them in a direct message to you.

    0Reply
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