New Member from San Francisco, CA

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New Member from San Francisco, CA

Kristian Clemens
Member since 2019 · 12 posts · 3 votes
Hello BP community! My name is Kristian, and I'm a newbie (OK, longtime lurker) in my late 20s from San Francisco. It was always my dad's dream to build a portfolio of rental properties that would enable him to quit his job and do whatever he wanted. He never made it past his first unit, but he inspired me (15 years later) to start looking into the possibility of investing in real estate. I graduated from Cornell University in 2013 with an economics degree and now work for a midsize bank in downtown San Francisco (not a particularly original path, but it's worked for me!). My first priority when I got my job a few years ago was to pay off my student loans. Then I started saving up to move into my own apartment. Now I'm financially stable enough that I'm looking to invest some of what I have saved into real estate, with an initial emphasis on cash flow.

I've been listening to the BP podcast and Real Estate Rookie for over a year now, and I've read a few of the excellent BP books. Yes, I'm yet another young aspiring investor in an expensive market, so I've decided to educate myself as much as possible and prepare for the leap into long-distance investing! My leading candidate market is Milwaukee, WI, and I'm looking at either SFR rentals or duplexes with property management.

In the short term, I want to buy one residential property in 2021 and then decide if I want to keep going. As I'm studying for a difficult work-related exam in June, I'll probably be looking to "take action" in a few months. Ideally, the first deal would be as close to "turnkey" as possible so I can get my foot in the door, and I can decide if I want to take on more ambitious projects later. The books really laid everything out very well, but I can't shake the feeling that there are many aspects (e.g., the inspection and diligence phases) of a purchase that I simply won't be well equipped for when the time comes. If anyone has any words of wisdom or advice for a newbie who wants to buy his first long-distance property in 2021 (besides "stop taking crazy pills"), I would love to hear it! I can already tell this is a great community, and I've already achieved my first goal by becoming a part of it. Thank you!

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Steve RozenbergPro Member
Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
5y

First thing I would do as others in here have stated is figure out "WHY" you are doing this. Once you know that and you know your end goal then you work backwards. The goal has to have a finite destination and time limit on it.
For example you may say your goal is 20 houses in 20 years (paid off) earning $20,000 per month.. (20,20,20 goal).
Now you know where you're going and the timeframe for this to happen. From here you can build out your strategy, for example here you would want to have the 20 properties purchased the first 10 years so that they can use the final 10 years to pay themselves off. This means that you have to buy 2 properties per year which means you have to close on a property every 6 months which means that you have to find a property in 3 months to have it on the market and rented the following 3 months.
And the properties need to have a final cashflow of $1,000 per month after all expenses are paid. This will dictate where you purchase and look for properties based on that number alone.
My point is that you always start with the end in mind and work it backwards, this creates the strategy (Buy and hold, flip, Wholesale, Notes) which will be driven by the tactic (SFR, MFR, Mobile homes, Short term rental etc)
I always coach people and explain that the property is actually the last piece of the puzzle not the first.

Hope this helps

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  • Chad Wong
    Investor · Kaneohe, HI · Member since 2019 · 2 posts · 0 votes
    5y

    @Kristian Clemens, I can relate. I live in Hawaii and all my friends think I'm crazy for investing out-of-state. I'm an engineer, so numbers were really important to me too, so I set-up a spreadsheet to quickly analyze deals to make sure it was within my rent to value ratio. Since I didn't have close friends that were into real estate, I had to look to find other like-minded individuals who would join me on the journey and become mentors/accountability partners. I joined a group called simplepassivecashflow, the creator of the podcast/site happened to be from Hawaii and had 11 turnkeys before. Since then I was able to buy my 1st property in Birmingham, Alabama and see the "bigger" picture. I've been told "your network is your net-worth" and it couldn't be more true in real estate, you'll find that it's mostly a people-based business, so I encourage you to continue networking and building close relationships with other investors!

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  • Kristian Clemens
    OP
    Member since 2019 · 12 posts · 3 votes
    5y

    @Sonya Mays Thank you for the kind words of encouragement! It's a little strange- I don't consider myself a perfectionist at all, but I definitely feel that fear of the unknown. Taking things one step at a time will definitely help alleviate that feeling when I do start looking for a property in earnest. I think you're right: working with a trusted local will give me a lot of peace of mind, so I'll definitely prioritize that when the time comes.

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  • Kristian Clemens
    OP
    Member since 2019 · 12 posts · 3 votes
    5y

    @Rebecca Knox That's really good to know- I've learned that one can get contractor recommendations from a good property manager, but it seems even simpler if the property manager could also double as a contractor. I've heard of both of those companies, so I'll have to research them to see if they could be good options. Thanks for your advice!

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