All Forum Posts by: Becca F.

@Deepika Prakash

I'm guessing you're in California or NYC area? If you're in Northern California, I'd recommend Sacramento. If you're on the East Coast, maybe look within a 2 to 3 hour drive. 

I invest in the San Francisco Bay Area and Indianapolis metro area. For context I did live in Indiana so I didn't just pick a random city that's 2000 miles away. 

I agree with Jay's comments about Nevada. Property tax rates are one of the lowest in the country. I visited Reno and someone who owns a $800,000 house there is paying less property tax than my $300,000 Indiana home. I know several CA investors buying in Vegas. It's a quick flight away (or long drive if you're in the LA area) if you're in CA. 

I'd also look at the asset and more at Class A to B properties, and be cautious of Class C (I will never buy a Class C or D property again). 

If I had $320k, I'd invest in Nevada (Reno or Las Vegas) but that's too far away for you. I'd stay local (within a 2 hour drive) of Atlanta, maybe multi-family. 

Maybe commercial RE with NNN leases (tenant pays property tax, insurance and repairs). This would appeal to me not having to deal with residential tenants and all the issues but I don't have enough capital to buy commercial RE. I know a California investor who is buying fast food restaurants, coffee shops and medical offices in the Midwest and South. There's probably a lot more to NNN but could be worth investigating.

Your post shows one reply but for some reason I can't see it...strange.

Some of the forums don't get a lot of traffic. I notice that the "General Real Estate Investing" and "Starting Out" forums seem to get the most replies. 

I personally haven't house hacked (but I did rent out my primary home instead of selling it when I moved) but I do know a few people that do in San Francisco:

- One person bought a single family home (in reality two main levels, the lower level with a small kitchen) and an ADU. She is living in the 400 sq ft ADU and renting out 2 levels of the main house on AirBnb. For context she isn't a tech worker earning $400k. Her salary is closer to $150k (not a super high income by Bay Area standards). The AirBnb stays booked most of the year and generates a good amount of rental income.

- Other person bought SFH and is renting out the ADU as mid-term rental. People that do MTRs include: travel nurses/medical workers, business people, construction crews, people who are temporarily displaced from their home either their own renovation or from fire, water damage, etc.

Other ways to house hack would be to live in SFH and rent out the rooms, maybe to trusted friends (have a legal lease written up, run credit checks, verify salaries) or if you don't mind living with strangers, vet them thoroughly. The idea of house hacking is to help offset some of your own mortgage payment, not generate lots of cash flow, at least initially. Your tenants or roommates are helping you pay your mortgage. You'd have more privacy with a 2 to 4 unit but there don't seem to be as many of those as a SFH.

If you're open to moving out of the Bay Area, Sacramento is a lot more affordable.

Why not continue to invest in the San Diego area? I agree with Dan H's comments.

I invest in the Bay Area and Indianapolis metro area. Indiana is landlord friendly but my appreciation is much less than California. For context I have a Class A SFH (owned since 2013, nice suburb, great schools), which has doubled in value (from $140,000 to about $300,000 so pretty good for Midwest) but my property taxes go up significantly each year, 17% the last year. For context I lived in this house and have been renting it out since 2019. I have a long term tenant, going on 4 years now, slightly under market rent. I will be self managing soon so my "cash flow" will increase to a little over $200 a month since no more PM fee.

I also own Class C SFH, bought in 2023. My cash flow on paper is more like -$300 to -$500 a year from repairs called in by tenant most months. My net rental income is $100 a month if no repair calls. So far I haven't had vacancies as both homes were rented quickly. Hint: don't buy 100 year old "renovated" Class C homes in the Midwest.

If you're going to look OOS I would look at Nevada, Reno or Vegas. I looked around at Reno, planning a trip to Vegas. Nevada has one of the lowest property tax rates in the U.S. No earthquakes, tornadoes, hurricanes, might be a couple of wildfire areas in Reno. 

 I agree with Jay. I have several CA investor friends buying in Vegas. One even left the Bay Area to move there (no state income tax in NV). For me the negative cash flow on a long term rental, putting 20% down is a huge challenge but if I had tons more capital, I'd pick Nevada. Still trying to problem solve this and I think my kids would rather inherit a house in Nevada vs. Indiana. 

@Noah Mac

That's great that you're living at home to save money and are looking to start investing in real estate at 22. I'm going to be the huge dissenter here and suggest you re-consider NorCal and house hack.

You're in San Jose which is now the most expensive housing market in the Bay Area and has surpassed San Francisco. If you're able to work remotely you could use your higher Bay Area salary and move to another part of NorCal. I'd recommend considering:

- East Bay: El Cerrito, Pinole, El Sobrante, Concord, San Leandro, Hayward, maybe Antioch and Pittsburg (has some high crime areas), Brentwood and Oakley. You could probably find some deals in Oakland but Oakland and Berkeley have very pro-tenant laws so I'd be cautious. I really like Dublin, Pleasanton, Walnut Creek - nice suburbs with great schools, a bit pricey but I think still less than San Jose.

- Sacramento area: There are some duplexes and you could live in one side, rent out the other using 3.5% FHA loan or 5 to 10% conventional. A lot of Bay Area people are moving up there who are priced out here. You could also do long-term rental on one unit and mid-term rental or short-term rental (more for business travelers vs. vacationers)

- Central Valley: Tracy, Turlock, Fresno

- Possibly Manteca

For Out-of State, what about Reno or Las Vegas/Henderson?  It's much closer and Nevada has some of the low property tax rates in the country. This is where I would buy - 7% interest rates make it difficult 

I invest in the Bay Area and Indianapolis metro area. I've had mixed results in Indiana (posted many times about this). Class A (bought in 2013, nice suburb, great tenants, good appreciation) and Class C (bought in 2023, constant repairs, AC unit stolen, unsure if this property will appreciate enough to make up for my costs). 

I'd recommend attending local meetups. There's probably a lot in San Jose area. You can talk to investors who buy locally as well as OOS. 

Feel free to DM me if you have questions :)

I agree with Nicholas and Jake's comments. Sorry the Chicago condo rental didn't work out. 

I invest in the Bay Area and out of state (Indianapolis metro area). I did live in the Indy area so I had some knowledge of the market, now much more to a detailed level. You can read many of my previous posts/comments about OOS investing. I've had mixed results. That has been experience, Class A great (bought in 2013), Class C (bought in 2023) constant repair calls by tenant. I'm -$300 to -$500 most months - I'm unsure if it will appreciate enough for my costs and when to sell. If I knew I would be negative I would have bought in Sacramento, where it would appreciate and I could drive to in 2 hours. 

It's very difficult to cash flow with 7% interest rates unless you put a huge down payment. I'd focus on the asset. I agree with Drew's property class descriptions - too many California investors buy Class C properties far away and wind up losing money. Feel free to DM me if you have any questions. 

Hahaha... I watched Ron LeGrand's free webinar a couple of years ago. Something about targeting FSBO and owner financing, lease option, blah blah blah.

If you're going to pay for something, my cat and I started a cat tree flipping course. We also have a bridge to sell in Alaska. Just Zelle me and her $200 LOL...I'm kidding. 

In summary don't pay for anyone advertising courses/programs.

I'm also looking in Vegas. I'll be comparing it to Reno. I won't be traveling in May though. 

I know several California investors who have bought there. My first impressions of Vegas from conversations since I haven't visited in person: Southwest Vegas and Summerlin are nice, property taxes are low, property tax increase cap of 8% (not common in many states, although California has a 2% increase cap), diverse industries including major sports teams (the NFL and baseball teams from Oakland, CA are in Vegas now). 

Extremely difficult to do AirBnb and Vrbo in Vegas due to restrictions. Some people do this under the table but if they get caught, there are large fines. 

I'll DM you the agents I talked to. 

I agree on the comments, location, location, location and the numbers rarely turn out to be exactly like the projected numbers. 

I ran the numbers on a renovated property (seller did renovation) with some minor repairs after the inspection and my cash flow on paper is in reality -$300 to -$500 a month. Constant repairs called in by tenant. I bought two of these class C type homes in Indianapolis (sold the vacant one somewhat recently). I don't know if this area will appreciate enough for my costs each month. 

If I knew I was going be negative cash flow, I would have bought one $450,000 to $500,000 home in NorCal or Nevada, which would have higher appreciation. 

I've had California investors contact me and show me their numbers on properties in the Midwest and the South. Without me visiting this city and neighborhood and getting to know this area in detail, I'm not informed enough to help you make a decision. 

Great point. I've been sentimental about a home that was my primary residence in Indiana - I rented it out when I moved back to California. The first vacancy was difficult since my property manager sent me videos and photos of the move-out...why's there a gouge on kitchen counter, on the wall, and a few stains on the carpet? I kept thinking of it as my house. My PM reassured me that it's actually in very good condition compared to some of the move outs he's seen. 

I'm going on almost 6 years of renting it out (Tenant #2).  I've debated whether or not to sell this home (and the other Indy house) and buy closer to home (Nevada) where there is higher appreciation and lower property tax rates.