All Forum Posts by: Alexander Araniba

Levi, I would recommend looking into the East Bay. Like everyone here has mentioned, you need to develop a plan and the goal(s) you have in mind. The East Bay has relatively affordable homes, compared to the rest of the Bay Area. You can find decent looking homes that need TLC in the $500k range. Or you can go further East towards Antioch where homes are around $250k. And of course, you can always look out of the Bay Area, such as Fresno, Sacramento, Stockton, etc. My goal is to have rental properties that will generate positive cash flow over the next few years and eventually move up to multi-family properties. It would be good for you to connect with loan officers/brokers to see what you can afford based on your DTI, FICO, income, etc. Even if you're not ready to buy a property right away, it's always good to get the information directly from the professionals, and you can also see where you stand currently. I'm on the fence about investing out of state because I would like to get my 1st hands on experience for a rental property local. But it's so effin expensive! Nonetheless, the deals are out there! Good luck!

Hi BP,

I worked at a small business and had a 401k. And at the beginning of January, 2019 I started a new job at a bigger company. I am now on the fence of rolling over my money from the old investment company to the new one? Or if I should take it as a taxable income and use those funds towards the purchase of a rental property?

Breakdown:

I have about $17k, and after hearing the breakdown of what the IRS & State will tax, I believe it will be a little over $13k I will receive. And next year, I will be charged an additional 10% for early withdrawal. So, total will be a little over $10k. Additionally, there may be a possibility that I might get more. The old investment company said that they see on their system that I am entitled to 40% of the profit sharing. But they would have to confirm with my old company if that's correct or if I am entitled to the full 100%. 

I loaned $7k in 2017 to use towards the purchase of our 1st home. I have only brought down the balance to about $5k. So, I'll be taking a hit on this no matter what. The invesment company told me I can either A) pay it in full to avoid getting taxed or B) take the remaining balance as a taxable income. UNLESS some of you know of a loop hole that will allow me to not get this charged as a taxable income?

Present:

With this new company, if I roll over, I won't get charged anything. Only the $5k+ I mentioned above for the loan I got towards purchasing our home. 

Dilemma:

I'm 34, still somewhat "young." And prior to this, my wife and I have been researching and discussing a lot about buying our 1st rental property this year (2019). Our goal is to save up about $15k-$20k. So, if I took this taxable income, we will already be close to meeting our goal sooner than later. And with my new job, I got an instant 30% boost in my income. 

I am and have been working on increasing my FICO. Currently, I have it now at 650. I am still paying down my 2 CC's and I should be able to pay them off by next month. I'm hoping it'll boost my FICO closer to 700 or more. 

So, I am not sure what to do here. Should I rollover the funds or should I take a hit and use it towards an investment property?

Dear BP members,

I found BP because I have been going crazy researching the internet--reading articles, watching videos, etc. I initially started researching more on real estate investing because I've been trying to find a 2nd source of income. The majority of people always said "Invest in real estate!" 

A little about me. I am a clinical database manager (we set up databases for Pharma companies that have their drugs/meds under clinical trials. Then, when the study is over, that data is sent to the FDA for approval). And I am located in CA--SF Bay Area. As many of you may know, the real estate in this area is ridiculous. The average home goes for about $950k or more. Ie my family purchased their home back in 2001 for $350k, then sold it last year for $1.5m. And homes here sell like hot cakes. 

I got married and had a little one about 2 years ago. And instead of renting, my wife and I decided to take the plunge in purchasing a home. We saved up enough, got approved for an FHA loan, and we purchased our first home for $605k. It's a ways from work (1.5hrs each way), but it was the only way we could afford a home. It's been hard because our mortgage is about $4k/mo--not including utilities and other misc. bills. Now, with a new job on the way (more income) and raises, we don't feel it as tight.

Okay, so the whole point of this post is that we've been interested in purchasing property, out of state, and renting it out. I have come to the conclusion that purchasing property in the "sun belt states" is the best way to generate positive cash flow. My eyes have been on TX, possibly the cities within Fort Worth. I see properties ranging from $60k-$200k. I just found out today that there is a difference in loans when it comes to investment properties. The down payment ranges from 15%-20%. The lowest percentage goes for those with 720+ FICO. Right now, I'm in the process of getting there. Transparency, my FICO ranges around 600-640. Which is why we had to apply for an FHA loan. And as some of you may know, the killer on FHA loans is the MIP. If it weren't for that, we'd be paying about $1k less on our monthly mortgage.

I am not sure what I should be saving? But all I can take from my research these past few weeks (and using my experience from our 1st home) is to continue paying off my personal debts to get my FICO up. The other unfortante circumstance of FHA loans is that they don't have an equity line that you can use. You have to find a 3rd party, and to do that, one of the criteria is to have a higher FICO. If that's the case, I'd rather re-finance to a conventional loan, but I'm afraid of the interest rate spiking up (right now we have it at 4%).

Sorry for this long post, but what would be your advice(s) from the pros or people that started in somewhat the same scenario as me? I'd really appreciate your time and advices/opinions. I want to be financially secure and have passive income in the next few years. I want to not worry about not having the money to pay bills, cases of emergencies, or worrying how I will pay for my son's college. Making a 6 figure salary here is like being low on the middle class bracket...