Experienced Bay Area Investors - asking for your advice

4 Replies | San Francisco, California

To the experienced Bay Area investors out there, I'd like to ask some advice. My grandfather passed away and left many of our family members, including myself, with a lot of cash (I received about $1 mil). I'm looking to get started in real estate investing with this money in the SF Bay Area (where I live). My goal is to retire as early as possible with a very comfortable (~500k/year) passive income stream coming in.

If you were in my situation and just starting out as an investor...knowing what you know now, what would you do with the money? Where cities/areas would you buy from, what type of housing, what strategies would you employ, and why?

I would focus on fixers in southern Marin, of which there are still many scattered about in various states of disrepair.  Having lived here since 1994, through two substantial downturns, I have observed a stability and resilience to this region's housing that is really pretty amazing.  I would also consider the Ross Valley (San Anselmo and the Terra Linda area in San Rafael.  Same strategy.  Fix and hold/rent out.      

If you truly have a relative that left you a million dollars you probably would not be advertising this on a public forum.

However I will “bite” and would advise you to get some estate planning going.... I’m sure your family must have a cpa and attorney that has already been in touch with you on this.  Good luck.

It's hard to turn $1m to $500k/yr passive, that's a 50% return!  

That being said, I would consider pursuing multiple avenues in parallel, but you don't want to spread yourself too thin and lose focus.  Some ideas:

1. Take advantage of primary residence loans/tax benefits

2. Do some fix and flips to quickly earn money

3. Re-invest proceeds into long term rentals (stuff that has a balance of cash flow and appreciation) - BRRRR strategy is ideal.