California Registered Nurse looking to get into real estate

12 Replies

Hi,

I'm a 26 y/o Registered Nurse (2 years experience) from Los Angeles and I've always had an interest in real estate investing. I've been lurking on BiggerPockets for about 3 years now but finally decided to post about it.

I have two major goals I want to accomplish within the next 1.5 to 2 years, I'm currently able to save about $4000 per month and hoping to have 100k by December of 2019, if it all goes as planned. I have a good chunk of change saved up already.

1) buy or build my family of 6 (parents, siblings, and myself) a home in Los Angeles county, max 45 minutes from the coast. We've been renting for our entire lives, cramped into a 3 bed/2 bath.

-the area I want to live, the homes cost roughly 500-800k for a decent size 4-5 bedroom home. Thats why my goal is to save as much as possible for a good size down payment.

2) dip my feet into real estate investing (looking at options: flipping and/or buy&hold rentals). I'm currently looking at the Dallas, TX area because my brother just moved there for work and hopefully he can manage it for me. But also willing to look at other locations if the price is right with good returns.

-I don't want to spend too much on my first rental property as I'm just testing it out

-multifamily units would be great

-Market in California seems too pricey for me to easily get into real estate investing

My main concern is.. if I buy a rental property out in Texas, will I lose out on the benefits of being a first time home buyer in California when it comes time to buy my family a home?

Other concerns... 

-are first time home buyer benefits any good at all?

-how will owning a rental property change my taxes (how I file, how much will I owe at the end of the year, will it be beneficial, should I get together with a financial advisor, etc)? 

-what do you think about my goals, is it feasible?

-that's all that comes to mind right now.. but if you know of anything I should be aware of, I'm all ears and willing to listen.

Thank you so much in advance, I really appreciate any input.

@Julian Sung

First off--AWESOME on saving $4000/mo. You're killing it! Also, nursing is a tough career--thank you for the work you do.

In terms of First Time Homebuyer, the best thing you have going for you is an FHA which allows you to put 3.5% down on your first property--if it's your primary residence. This allows you to get into a home with a much lower down payment. Technically, the loan "costs more" but the benefit of buying with only 3.5% down is fantastic if you buy right.

Where primarily in Los Angeles are you thinking about buying the house for your family? It is definitely a costly market but sometimes you can go outside and find a great deal. Does your family need to stay in that exact market?  

@Julian Sung

Congrats on your savings .

I live in L.A too.

You mentioned buying a house for your family , just curious would you be the sole owner of the property or own it with all of them ?

It seems that could get pretty complicated in my opinion if there are multiple owners . What happens if you or one of the other family members wants to move out at some point for whatever reason ?

That could be helpful to have your brother living in Dallas if you decide to invest there , if he has an interest in real estate /property management too .

It sounds like it’s pretty tough to find cash flow in Dallas these days but probably easier than in the L.A area , I know property taxes are pretty high in Texas though .

@Julian Sung

Hey Julian I'm an RN too.  What specialty do you work in?  Couple questions for you:

Do you absolutely have to live 45 minutes from the coast?

1)Which is most important for you; living where you personally prefer or making the most off your investment property?

2)Have you ever done or considered being a travel nurse?  

I'm no expert on investing in the L.A. area but 800k for a sfh with 100k cash as an investment property doesn't sound promising...not for a very long time.

My 2 cents:  It sounds like you have a close knit family that wishes to remain together.  If you're saving 4k a month take @Travis Rasmussen advice about FHA on 4plex AWAY FROM THE COAST. If you're going to have 100k cash you could potentially go bigger than 4plex with more money down. That Texas idea sounds good for affordability. Family stays together, you can get some privacy, and have some units to rent out. Refinance out of that FHA later. The challenge you will have is residency. This is where my question about travel nursing comes in. Travel assignments pay very well. You have a California nursing license. California pays BIG bucks to travelers in certain areas. You will make more money for your time than you are in your staff position. But even if you go somewhere like Texas, you can work as a traveler within that state and be somewhat close to the 4plex that will have to be your primary residence. Let me give you a GENERIC example of what I'm talking about:

-Save up the 100k

-Julian Sung accepts a staff position in Dallas Texas.  (fulfill lender requirement for owner occupancy).

-Buy multi unit property in the area, Sung family moves to Texas and disperses in to units as desired.

-After a year at a facility in Dallas area, become a travel nurse.  (stay a year to have a good looking resume and to avoid residency issues in the future/satisfy owner occupancy obligation.  Travel pay increase for more investments)

-Accept travel assignment in Texas far enough from primary residence to satisfy IRS requirements to qualify for tax free stipends while being close enough to go home when you feel like it (consult tax accountant NOT the travel agency on how to satisfy this requirement) or take some assignments in CA for the big bucks if you have somewhere cheap to stay nearby (family/friends)

-Keep doing travel assignments consistently for 11 months maximum and return to primary residence area for IRS requirements (again consult tax accountant).  Lenders get scared of travel nurses but need to see you're not at risk to lose income.  IRS gets mad if you work travel assignments for a year paying low taxes.

I've been doing travel assignments to boost savings for more properties.  

Originally posted by @Travis Rasmussen :

@Julian Sung

First off--AWESOME on saving $4000/mo. You're killing it! Also, nursing is a tough career--thank you for the work you do.

In terms of First Time Homebuyer, the best thing you have going for you is an FHA which allows you to put 3.5% down on your first property--if it's your primary residence. This allows you to get into a home with a much lower down payment. Technically, the loan "costs more" but the benefit of buying with only 3.5% down is fantastic if you buy right.

Where primarily in Los Angeles are you thinking about buying the house for your family? It is definitely a costly market but sometimes you can go outside and find a great deal. Does your family need to stay in that exact market?  

Thanks Travis! My main concern would still be, can I still get a first time home buyer loan if I buy a rental property first? My parents want to stay in the San Gabriel Valley. I can't take the drive, if it is too far from work. 

Originally posted by @Joseph M. :

Julian Sung

Congrats on your savings .

I live in L.A too.

You mentioned buying a house for your family , just curious would you be the sole owner of the property or own it with all of them ?

It seems that could get pretty complicated in my opinion if there are multiple owners . What happens if you or one of the other family members wants to move out at some point for whatever reason ?

That could be helpful to have your brother living in Dallas if you decide to invest there , if he has an interest in real estate /property management too .

It sounds like it’s pretty tough to find cash flow in Dallas these days but probably easier than in the L.A area , I know property taxes are pretty high in Texas though .

 Thank you Joseph! I would be the sole owner of the property as I'll be putting down the majority of the down payment. But I would definitely help my siblings move out, when the time comes. I just looked up the property tax in Texas, and its double of what it is in California. I didn't know that! so thank you! 

Originally posted by @Rodney Sums :

@Julian Sung

Hey Julian I'm an RN too.  What specialty do you work in?  Couple questions for you:

Do you absolutely have to live 45 minutes from the coast?

1)Which is most important for you; living where you personally prefer or making the most off your investment property?

2)Have you ever done or considered being a travel nurse?  

I'm no expert on investing in the L.A. area but 800k for a sfh with 100k cash as an investment property doesn't sound promising...not for a very long time.

My 2 cents:  It sounds like you have a close knit family that wishes to remain together.  If you're saving 4k a month take @Travis Rasmussen advice about FHA on 4plex AWAY FROM THE COAST. If you're going to have 100k cash you could potentially go bigger than 4plex with more money down. That Texas idea sounds good for affordability. Family stays together, you can get some privacy, and have some units to rent out. Refinance out of that FHA later. The challenge you will have is residency. This is where my question about travel nursing comes in. Travel assignments pay very well. You have a California nursing license. California pays BIG bucks to travelers in certain areas. You will make more money for your time than you are in your staff position. But even if you go somewhere like Texas, you can work as a traveler within that state and be somewhat close to the 4plex that will have to be your primary residence. Let me give you a GENERIC example of what I'm talking about:

-Save up the 100k

-Julian Sung accepts a staff position in Dallas Texas.  (fulfill lender requirement for owner occupancy).

-Buy multi unit property in the area, Sung family moves to Texas and disperses in to units as desired.

-After a year at a facility in Dallas area, become a travel nurse.  (stay a year to have a good looking resume and to avoid residency issues in the future/satisfy owner occupancy obligation.  Travel pay increase for more investments)

-Accept travel assignment in Texas far enough from primary residence to satisfy IRS requirements to qualify for tax free stipends while being close enough to go home when you feel like it (consult tax accountant NOT the travel agency on how to satisfy this requirement) or take some assignments in CA for the big bucks if you have somewhere cheap to stay nearby (family/friends)

-Keep doing travel assignments consistently for 11 months maximum and return to primary residence area for IRS requirements (again consult tax accountant).  Lenders get scared of travel nurses but need to see you're not at risk to lose income.  IRS gets mad if you work travel assignments for a year paying low taxes.

I've been doing travel assignments to boost savings for more properties.  

 Hey Rodney, thanks for your input! I work in mental health and hoping to become a PMHNP in the future.

Living close to the coast (I only mentioned coast because the hospital I work at is close by the coast) would definitely be ideal, especially since driving after a shift, I doze off very easily while driving... even if I nap in the car before hand. I don't want to kill myself haha

I really appreciate the input Rodney, I really do. But I don't think travel nursing would be for me lol, I love where I work and I love knowing the people who I work with every night, not having to re-familiarize myself every time (with the people and the work environment). Although the money would be great, I think travel nursing for me personally would be too taxing on the body (physically and mentally). Props to those who can do it, truly.

My family wants to stay in Southern California. I'm just looking for rental properties out-of-state to invest in for passive income and wanted some input. The market in California is too expensive to invest in for rental properties.

@Julian Sung Unfortunately you aren't going to find much cheap / low cost MF in DFW right now. The market is hot and it is very tough to find a good deal. It isn't impossible but you might need to go different routes than just the basic MLS search. Direct mail to MF owners, finding rundown MF and doing a big rehab, or trying to find land zoned MF and building new (also very rare). I wish you luck in your endeavors. I moved from Orange County 10 years ago because real estate was just too expensive and I wanted a slower lower cost way of life.

@Julian Sung . If you bought a rental property first, should not affect your ability to get an FHA Loan. as FHA loans are available to any owner occupant at the same 3.5% Down Payment requirement.

As to "First Time Buyer" benefits - generally, there are NOT any specific "First Time Buyer" FHA programs as such. Having said that, there are on occasion, programs specifically created by State and or local Housing entities aimed at increasing availability of loans aimed at "Low Income" Buyers. Typically, these types of programs have very specific (Limiting) requirements. I.E. you can't make more than $XX amount, or you must buy in these specific Zip Codes. It's a form of financial "Social Engineering".

Sounds like you are doing things right - saving money and taking care of your family - Good On You!

@Julian Sung

Hmm, coming back to this thread there is a lot of good information. Your situation sounds tough though-->buying a home for 500k-800k can, I hate to say it, slow you down with investing. It's hard to even type that because your #1 goal was to get your family out of the cramped 3/2 bath your currently in. :/

I also understand that you don't want to go far for safety reasons when driving back home, I take it your work the night shift? 

@Julian Sung

Oh you want to become a nurse practitioner that's great!  As an investing nurse I'll give you my opinion but remember this is just my opinion.  Combine that with other's opinions and your own.

School will be time consuming, stressful, and decrease your income for a few years.  This will slow down your savings.  You will have debt when you're finished which may affect how much loan you qualify for (depending on other debts you have at an NP salary you should still be able to get something).

As a travel nurse you would of course sleep near where you work not drive hours back to your primary residence.  There are nursing websites with forums that discuss travel nursing.  But if you were open to relocating and investing in a market less expensive you could by all means keep a staff position and stay in your investment property.

What I hear you saying is working in a familiar job and living in a location you personally prefer has more priority than making the best real estate investment for the money you have.  It sounds like you may want to continue saving beyond 100k and buy a multi family in SoCal.    Your investment in real estate will not be passive.  You will have to be involved.  If it's a multi family out of state and you're new to this that could be challenging with you working nights/pursuing your Master's degree.  Buy in your area.  If your family has income, credit, money to chip in and you all get along well enough to do business together this could help you have more options.  

Hi everyone, it has been two years since our last post. So far, I purchased a house in Southern California for my family and I. Sadly, it is not a multifamily. I am now in another dilemma. I have always had a goal of owning multiple rentals but I don't know which career to choose. (go back for my masters in science in nursing PMHNP option OR become a part-time real estate agent/full-time RN (currently working 3 days a week, 12 hours shifts, night shift). 

I got accepted to start my masters of science in nursing with a focus on mental health. But I don't know if I want to really want to become a PMHNP (Psychiatric Mental Health Nurse Practitioner). I believe they earn about $140,000 to $200,000 (sometimes even $300,000/year). Which means more money for investing. Currently, as an RN, I earn approximately $120,000/year. I don't know if I want to go back to school for two years for added responsibility (prescribing and diagnosing patients). 

The other option is become a real estate agent, which is practically in line with my goal of owning multiple rentals. My friends and their aunts and uncles, always say I "light up" when I talk about real estate. I already enjoy driving around neighborhoods and looking at homes. I'm not shy to knock on the doors to ask homeowners questions. I think becoming a realtor, I would know the ins and outs of real estate. I would be surrounded by other like-minded individuals who like to invest and hopefully help me as well (correct me if I'm wrong). All I do on my free time at my RN job is look at homes and update my self on the housing market. 

How is it being a real estate agent? Is it cutthroat? what is their earning potential? Would I be able to retire from my RN job sooner as a realtor, if I get enough properties?

I start my grad school in a month and I don't know what to do.... 

@Julian Sung it does not sound like the career extra school would bring would bring you happiness. Not always best to do things for money.

RE sales is feast or famine. Being an RN is a great job and you can do RE sales and be an RN at the same time. Having a license while being an RN 3 days a week would give you a great education and you can become financially independent. Once there you can do as much school as you like IMO.