Newbie Investors: Currently in California

11 Replies

Hi y'all!

My name is Sara Roane and my husband and I are real estate investors. We've yet to make our first deal and I've been studying, analyzing and planning for almost two months now. Neither of us works in real estate - I'm a yoga teacher and he's a research chemist. Real estate is a newly found passion of ours that we plan to use to achieve financial freedom and create multigenerational health & wealth for our family - just married last year!

We had originally planned to house hack, however, have found ourselves in a tough market (Bay Area) where FHA seems unheard of, landlords seem unprotected, and all of our seed money would end up locked up with little return - at least that's how the deals are feeling so far... I could be wrong, still learning!

We're shifting our approach and have been analyzing markets out of state and we're taking on Brandon Turners 90 day challenge! 

Posting here for accountability! 

We will make an offer by August 31st on a multiplex rental property with a minimum of 4 units - market TBD.

Woohoo! That feels good :)

Looking forward to learning from, connecting with, and eventually being able to pass on what I've learned here in the BP community. So glad we found BP!

Thanks for reading, have a great day!

Hi Sara. Good plan, and great to do it via a challenge!

Do you know what you're looking for with an MFR out-of-state? In terms of- what will make a good investment property, how to choose a location, risks, etc.

Thanks for the welcome and encouragement! Definitely working on it @jake stuttgen !  

@Ali Boone we're getting there I think. We've narrowed our market down to the San Antonio/San Marcos, TX and Northwest Arkansas. I'm using the calculators to determine cash flow with our goal being $100-200 monthly cash flow per unit and at least 12-15% cash on cash return.  I'm looking for properties listed 20-30% below market and/or distressed properties that just need some cosmetic repairs so we can improve the value once purchased. This is my general first glance analysis. Any further tips? 

Originally posted by @Sara Roane :

Thanks for the welcome and encouragement! Definitely working on it @jake stuttgen !  

@Ali Boone we're getting there I think. We've narrowed our market down to the San Antonio/San Marcos, TX and Northwest Arkansas. I'm using the calculators to determine cash flow with our goal being $100-200 monthly cash flow per unit and at least 12-15% cash on cash return.  I'm looking for properties listed 20-30% below market and/or distressed properties that just need some cosmetic repairs so we can improve the value once purchased. This is my general first glance analysis. Any further tips? 

Not really since I don't fix up any properties (I always buy turnkey). But just be sure to really be on top of the numbers is my only advice that pertains to any strategy. I don't know the exact dynamics of those markets to know if it can work, but I'm not sure if that combo of numbers-- $100-200/door, 12-15% CoC, and 20-30% below value all work together. Maybe they do, I have no idea on the under value part, but I wouldn't think $100-200/door would get you to 12-15% CoC given what I'd imagine MFRs in those areas may cost. But maybe it works, I actually don't know. Just stay on top of them though. That's my best advice offer :)

@Sara Roane congrats and nice work! Definitely should consider house hacking a 4 flat living in for 1-2 years then move out and rent 4th unit

I also like the live in flip idea, find a place you can live in but update over 2 year period then sell as this income is tax free upon sale up to $500k profit for couple $250k for single but now you’re married

HUGE fan of both strategies by I’m doing second myself and just finished rehab and rinse repeat every 2 yrs

Also I believe @Mindy Jensen has done this as well in the past

Also keep doing what you’re doing never stop! GL reach out if y’all have any questions ever

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