All Forum Posts by: Becca F.

HI Shawn. I invest in the Bay Area and also out of state (Indiana). Please read some of my previous with comments to Californians looking to invest OOS. It's much harder than it looks. 

Please clarify what you mean by "solid rental returns". Do you mean net rental income, cash on cash return over the years, factoring those with appreciation, et? In reality there is no cash flow in 2025 anywhere unless do STRs or some type of higher risk strategy other than a conventional loan or DSCR loan. There's also risk with subject to loans - I don't do those.

If you mean by initial cash flow that doesn't necessary correlate with appreciation or long term gains. Historically as far as long term wealth building, who's going to do better: someone who has 5 high quality properties in the Bay Area/LA/San Diego or someone who bought 20 inexpensive homes in OOS markets? 

  I would look at experienced investors from California who post on here or better yet, attend local meet ups. It's better to have actual conversations with investors who done in-state and OOS investing. There's are several meet ups in San Jose. Look at MeetUp.com. I attend local meet ups which target different strategies and can give you information if you're interested. 

Btw I'm a W2 employee and not an agent or work in the real estate industry in anyway and not trying to sell you anything,  just trying to help a future CA investor not lose money. 

I don't mean to be negative just realistic. I do think your experience with operations management and customer service would help in real estate. 

Feel free to DM me if you have questions :) 

@Mike Schelske

As far as the day in the life of a real estate investor, I still work a full-time W2 job. I might be at work and need to communicate directly with a tenant on an urgent issue so there are some time management issues.  I self manage local and out of state single family homes and I have a PM for the other properties. I also review the financial statements from my PMs and ask questions. There's definitely a hassle factor - spending 4 hours talking to contractors and my tenants on a Saturday instead of relaxing on a weekend like most people do. 

I've read one book. I listen to podcasts, watch videos and attend Zoom webinars. I became more educated with the construction side especially with walking my own renovation with a contractor and know a lot more about renovation costs with HVAC, roof, flooring etc. 

As far as leaving your 9 to 5 it'll be extremely difficult in 2025. The people who quit their W2 jobs are the exception not the norm. The only people I know who quit their W2 jobs are: one investor who bought in the Bay Area and SoCal (back in 1990's to 2010), one person who lives out of state that bought from 2014 to 2021 and lives a very frugal lifestyle. They both own long term rentals and self manage. 

 I know two high earner tech couples who started with house hacking in the Bay Area and scaled within 7 years (2014 to 2021), which is very fast - they took on a lot of risks that I personally wouldn't do (or could afford to do). They turned RE into a business with companies for raising capital, GP (General Partner) for syndication, doing STRs, etc. They replaced their jobs with becoming entrepreneurs, hardly the "passive income" that's presented by social media gurus. 

I made the mistake of spending hours analyzing properties on Zillow in a market that wasn't the right strategy for me in hindsight. It's important to network with people in real life and walk properties and neighborhoods, which look very different in person than on video or photos (especially for out of state). It's difficult to be a RE investor by just doing things online. I attend meet ups in the Bay Area and am constantly learning. 

@Ian Henderson

I agree with Nicholas' and Carlos' comments. I'm in the Bay Area and have invested in the Indianapolis metro area. For context I did live in Indiana then moved back to California so I didn't pick a random unknown market 2000 miles away and things still went wrong. 

Please read some of my previous comments to other California investors who posted recently. There are so many stories of CA investors losing markets on these "cash flow on paper" markets, including myself on Class C type properties 

I'm not an agent or work in any real estate industry so I'm not trying to sell you anything, just advising you to be very cautious. You said the magic words "California investor". I don't mean to be negative but I don't want you to lose your $70k to $80k buying a bad deal, like I did. 

If you really can't buy in CA, I'd look at a high quality property in Nevada but you'll need more than $70k (this is where I've looked recently). I'd recommend attending local meet ups to talk to CA investors that buy locally as well as OOS. Good luck. 

Well said! The last three California investors I talked to are buying at or above the median home price out of state, $400k to over $500k for those who already have a primary residence here or don't want to buy locally. Those three are doing new builds coincidentally. 

I think they've heard too many terrible stories of buying $100k to $150k single family homes. That's a recurring theme when I go to local meet ups about Class C in the Midwest/South when I talk to other investors here. 

@Michael Zagorsky

I agree with the other comments. You mentioned cashing out of the long term rentals and AirBnbs you had before. Was that because you didn't like investing in real estate anymore? Not trying to be too nosy. There is a hassle factor with RE for sure. 

For me if I came into a windfall, it'd be toss up between putting it in index funds and buying more real estate. My reasoning is to buy a rental property to leave my kids more property so they can either continue renting it out or one of them move into it as their primary home. It would NOT be for cash flow reasons for me - in fact I'd be break even (at best) without accounting for future capital expenses or vacancies, etc if I bought a new build (lower interest rate with builder) or negative cash flow. I bring this up because I've seen at least 6 posts (specifically from CA investors looking for cash flow).

I want to leave my kids assets because I think the younger generations will be in a very bad financial spot, unlikely they'll get Social Security, inflation, other world issues etc. I'm willing to sacrifice some of my own comfort and retiring earlier for my kids. 

I'd leave the money in a HYSA and let it sit while you think through your options. Good luck. 

Wow. I thought California would be a lot higher but median skews the number lower vs using average, which I think would be higher with higher income earners pulling the number up. 

 A $85k would be considered low to moderate income in the San Francisco Bay Area. People can get BMR (Below Market Rate) apartments here (huge waiting list). They use Area Median Income (AMI) to determine some of these numbers. No one could even qualify for a mortgage here unless using a first time buyer assistance and some very generous cash gifts from parents for a huge down payment. Someone making $85k  is renting a rent controlled apartment from years ago or has a few roommates if paying market rate rent. A family of four in S.F. with $100k income is low income. 

Here's an example of CalHFA with income limits to qualify for first time homebuyer assistance. A household could make up to $325k in San Francisco. The lowest income I see is $185k for several of the Northern California counties.

https://www.calhfa.ca.gov/homeownership/limits/income/income...

It'd be interesting to see a breakdown of the major geographic areas: S.F. Bay Area, Central Valley, L.A., San Diego, and less populated NorCal and SoCal areas etc. 

 Thanks for your perspective. I assumed OP's properties are all in California and probably San Diego area. 

I was wondering why OP wasn't getting a good return if they started buying in 2010 with low property tax unless they weren't raising rents on single family tenants. I've talked to several Bay Area long-term investors (going back to 1990s to 2008) who said they never raise rents on good tenants and was shocked - I admire them being charitable but I wouldn't do that. 

I don't know about buying apartment buildings OOS. That was suggested to me - huge pass, give up a SFH here with low property from Prop. 13 for the unknown but I don't have a large portfolio.

It'll be interesting to hear back from OP to our comments. 

Thanks Brad! I was just wondering why Reno wasn't included for Nevada. Everyone in the world knows about Vegas. I would consider Reno a major city in Nevada. 

Should I infer that longer DOM means trending toward buyer's market in Reno? And more rentals available, is that a good or bad thing for investors looking to buy? 

In the Bay Area homes are sitting longer - no more multiple offers on properties just thrown up on the MLS. A few people are doing set the price low to try to start a bidding war, not sure if that's successful.

 Thanks Matt! I just DM'ed you. 

 On the Nevada one, were you able to find data for Reno? I looked in Reno, considering Vegas. I'm kind of surprised Vegas is down 4% for YoY since Vegas is huge entertainment and tourism. The Oakland Raiders (football) and As (baseball), both from the Bay Area are now in Vegas

Do you mind if I DM you about my specific situation?