All Forum Posts by: Chris Williams

Given your update, let me say this. Most people would point you toward the Sacramento area. And that's a good bet, in general. Expensive, but certainly better than the Bay Area.

Let me share something I heard with you though. It came from a co-worker who keeps tabs on several markets. He said that people are moving further and further east of the Bay Area, and commuting back in. We're talking property into the Central Valley and a little bit further!

That might be worth looking into as well.

Animesh,

I myself am not a pro either. But I'm in your neighborhood and am happy to share some thoughts.

First, good on you for picking up the condos when you did. You probably have some good equity built up. That said, I am of the mind that it does NOT make sense to invest in the Bay Area. Not in 2018, or 2019 for that matter.

I see entire strip malls vacant because the rent is unmanageably high. I see apartment complexes advertising vacancies with jaw-dropping rents. (Seriously. I saw a 2BR/1BA apartment in Fremont the other day for over $3,500/month!) I've talked with agents who only have overseas clients as no American can even come close to the bloated bids those overseas clients are throwing out.

Personally, if I had two Bay Area assets to my name, this is what I'd do:
1. Sell both of them. Unless you're living in one. In which case, sell the other one. My subsequent advice will assume you're selling both.

2. Conduct a 1031 exchange. This will save you on taxes.

3. Exchange the capital into as many small multifamilies as you can...OUTSIDE OF CALIFORNIA. Your dollar will go much farther outside this state. May I suggest the following metro areas to consider:

• Pittsburgh, PA
• Indianapolis, IN
• Dallas-Fort Worth, TX
• Birmingham, AL
• Raleigh-Durham, NC
• Cincinnati, OH

You should be able to pick up more than one multifamily, or possibly a small apartment complex, in these areas. Easily.

It will cash flow steadily. You won't get huge appreciations, but repairs will be cheaper and they'll have stability.

Hope that helps.

Thanks everybody. This is encouraging news. Something for me to look into further.

A colleague of mine mentioned that he's moving to Indiana in 2018. He has an IT business out here in Silicon Valley. It's doing well, making him good money. Yet he wants to pack up and head over to the Indianapolis region.

Given housing prices here I can't blame him! But I'm left wondering, why Indiana?

Does 2018 hold promise for Indiana's economy, its housing markets, etc.? If so, how do things look out there?

Admittedly I was already curious about RE in Indiana. This spurred me to take a closer look. What are your thoughts about Indiana's 2018 outlook?

@David Ruiz, right there with you on this one. I can't move out of state yet; job and girlfriend keeping me here. Which messes up my ability to use FHA too.

I did want to mention that one of the more recent podcasts had David Greene on it. He's published a book on long-distance investing. Here's the podcast link:

https://www.biggerpockets.com/renewsblog/biggerpoc...

The book's on my reading list for 2018. I expect it would help both of us. Best of luck.

I don't invest in Redding, but I lived there for many years. Mom still does, as do a couple friends. From what I hear, appreciation is very much stagnant there. The city underwent an expansion several years back, but that's apparently stopped. Prices jumped at some point in the past decade too; I looked at a couple places for Mom in 2016, but the numbers didn't work out at all. (2BD/2BA with damaged beams & sagging floors for $350K? Get out of here!)

I agree with Ed. Niche areas outside the cities are better for long-term. It's where people will retire, or cash in from Bay Area living. You might try along the North Coast, like Humboldt County.

Oh, on this I can contribute. Whenever I want a reminder of negative attitudes toward money, I just go visit family.

I come from a large family...5 siblings. Only two of us are successful, myself and one sister (and that's because she married a smart guy who makes good money). I'm not wealthy by any means, but I can save money while living in Silicon Valley, if that means anything.

The rest barely live at all. Living on welfare or paycheck-to-paycheck. No savings. Carrying debt like anchors, and constantly whining about having no money. They aren't stupid; they don't have to live this way. One of my brothers is better at math than me. He's studied cryptography and high-end finance. He could easily outearn me in a half-dozen financial roles. He hides behind "just one more degree" (he has 3) and tends bar for spending money.

In the past I would offer family suggestions on making money - start X business, study programming, talk to this friend at ABC Corp. Even offered loans to help. They won't do it. They sometimes refuse to my face, saying it's "not possible" or "that won't work."

Then they ask me for money. When *I* refuse? Oh man, here comes the guilt missile. You make money, you owe us, GIVE!

I put $2,500 into getting my mom a mobile home last year. I told her I would do this as a gift if she got her finances in order. She agreed. Want to guess the state of her finances now? (Should have gotten it in writing...)

I have to fight against this attitude almost every day. They shoved the same perspective into my head for decades. Money is evil, wealthy people are bad, you'll just fail if you take a risk. It's why I didn't take an opportunity to buy some cheap land just outside of Half Moon Bay 4 years ago...land which is now under contract for development. Oops.

Dang Elbert, go you. Awesome numbers.

Me, I'm just sitting over here with two RE goals: Save enough money to buy in, and buy 1 property.

I wiped out my student loans this year - my last debt - so I'm free & clear to save up. I'm not as ambitious as Anthony is...would just like to slowly build up a portfolio over 10 years. Get to a point where rental income affords me a decent lifestyle. (Being a writer, I value time more than money. This would give me the time.)

Donavon,

Speaking only for myself...no. For two reasons:

1. The crypto market is horrendously volatile. I admit, cryptocurrencies intrigue me. Followed the trend for a little while. I own a little bit of one, and may try buying a couple more next year. That's to play with though, not make money. The market is so overstuffed and so speculative that it unnerves me. I am no economist, but the whole thing SCREAMS "bubble."

When it pops, and a little time goes by, we may indeed see something stable and respectable growing from its remnants. At such a time, using crypto to buy RE may be a prudent course. But not now.

2. Real estate-dedicated cryptocurrencies already exist. Thus rendering a service at least partly redundant (unless you're building the service within one of those cryptocurrency's blockchain).

Look up REX, Reidao, and the REAL Platform to name a few. Thing is, as far as I know, all of these are floundering. Nothing near the investment level of Bitcoin, or the diversity of Ethereum. And we already know my thoughts on these currencies' inherent stability.

Now, I don't own properties yet. But when I'm ready to buy, it'll be with good old cash. Hope that helps.

@Cody Evans

"Referencing your thoughts on managing out of state being easier due to technology evolving: Is it standard to have a clause in PM contracts that include digital walkthroughs of the property every once in a while?"

Quite frankly, I don't know. But I see no reason you can't put one in.

I've toyed with the idea of getting a drone & flying it around a property. Yes, even inside. "Live stream from inside your potential investment!" Likely not too practical, especially when a PM can just walk the property with their phone. But it's fun.

Another (slightly more serious) idea I had was to insert twice-annual walkthroughts into both the PM and tenant contracts. Twice a year, at random times throughout the year, someone will come do a walkthrough. The PM, a rep, or even myself if I'm close enough. The tenant will have the standard 24 hours notice of course. This way we can catch issues...hopefully before they get bad.