All Forum Posts by: Bradley Buxton

@Lars Bruinink

As a former San Luis Obispo resident 480k sounds like a great deal. I'm assuming that is not in San Luis Obispo proper. Keep in mind there are lots of ways to make money in real estate and some strategies take more money to cash flow. Think of it like a business, a lemonade stand doesn't take much capital compared to starting a brewery.  If you don't have enough capital to invest in a market to make it work then you'll have to look at other strategies and markets.  As a long time SLO resident I was priced out and moved to Nevada. Reno has some great investments and industries such as Tesla, Apple, Microsoft, etc. moving to the area. I tried not to get caught up in sticking to hard rules and look at the long game because that is my strategy. If a deal looks good but my target was 8% return and it only makes 5% and there is more appreciation or other advantages it's still a good deal. I try not to throw out good deals waiting for a great deal. 

@Catherine Frederick

Are rents going up 11% per year? Will the HOA be increasing or have special assessments in the next 2-5 years? Is there a shortage of housing in the area? Positive high wage job growth and population increases? Investments in the area by the city. The appreciation might be a way to make money in 2 years more than the rents. If there are other benefits for you where you can save money or a better quality of life it still might be a good investment just not a good rental.

@Komal Sekhon

House hacking is a good way to discover a market out of your area, maybe Bakersfield, Oakhurst, or Reno, NV. With interest rates as high as they are the cash flow is is going to be minimal in most appreciation markets, for now, they will eventually go down, eventually. Appreciation is a longer term wealth building strategy and over time in good markets rents will also go up increasing revenue. With house hacking you can live in a new place and get lower interest rates. Your experience managing in CA gives you an advantage because it's not a landlord lord friendly state and there is still good appreciation in CA. 

@Nick Johnson

One think I recommend to clients is to think about why you're investing and what are your goals for 1,3,5 years?  This helps guide your decision on where to invest and which strategy matches up to get you closer to those goals of why. If that's house hacking, cashflow, appreciation, flips, in-state, out-of-state etc. Then weight the pros and cons of each market. 

@Chris Murdien

Look into the Tesla battery packs and do a cost analysis. They charge during hours when power is cheaper and then you can use the pack during peak times. The technology is improving rapidly. It will also depend on your tenants and your area. Here in Reno, NV Tesla has a factory building battery packs and the new semi-trucks and some tenants value the technology of battery packs, EV chargers, smart home features, etc., and would pay a premium to have such amenities. The goal I would think is to increase your rental income and solar might do that but there are alternative investments in your property that might get you higher returns.

@Marilyn Thompson

I'm a former CA resident that moved to Nevada (Tahoe / Reno) area.  I have found properties in the area that generate cash flow with a 30% down payment. The construction of a Tesla semi-truck factory will create 3,000 to 5,000 permanent jobs in the future. Being the nearest city to California, the area is easy to manage, has low property taxes, and is favorable to landlords. These factors make it a good investment area. 

Quote from @Camron Corona:

Looking for my first deal and I’ve been using the deal check app and have had little luck finding a good deal. What’s a good ballpark monthly cash flow for a long term rental? 

Your deal design goals and capital will guide your decision if a property is a good deal. Lots of variables to look at and what’s good for you may not be a good deal for a different investor. For example everything cash flows when you buy in cash.

@Chris Albert Beltran

Welcome to Bigger Pockets.  Happy to connect and share ideas.

@Diran Deukmajian

CA is an expensive market and if you can get into the market it can be a good way to build wealth. There are challenges investing OoS as other posters have stated and having a good trusted team in place will manage those. There are trade-offs to all investments, I moved out of CA to Nevada because of the tax benefits and it's a much more landlord-friendly state. I've worked with investors around Lake Tahoe and Reno, NV because they did not want the hassle of flying across the country to manage a rental but still wanted to be close to CA. With any strategy do the research, look at job growth, migration, and supply constraints. Think about your goals what type of investment you're looking for and how much time and capital you have to stabilize the investment. It might reveal where it makes the most sense to invest.

@Robert Mendenhall

House hacking a duplex is a great way to get started and there are other benefits to owning over renting. Look for rental comps in the area and check the math. If you pay market rent and your tenant in the other unit does too will both rents cover the loan, insurance, taxes, maintenance?  If you have to cover more than market rent on your own it still might be beneficial to own but you are taking on risk if the rents in the area are not increasing or you want to move out. As Jaron stated you will need to plan for the unexpected, such as vacancies and repairs. Vacancy will kill your cash flows so it's good to have savings just for such an occasion. 

Are there other ways you can increase the income such as rent by the room or renting a room on the side you live on. Everything cash flows when you buy with all cash. The more cash you put down the more it will cash flow. In the Reno, NV market you'll need around 30% for a conventional loan. There might be some other creative loan products that are available to you so having a good lender can help reduce the monthly payments until the rents increase or you can refinance at a lower rate.