All Forum Posts by: Chris Williams

Cody,

Your goals and mine are quite similar. I'm down in Fremont, with a few more years on me.

Since you're up in Fairfield (which I think is a little more affordable than my neck of the woods!) and you're sharing expenses, I'd say you'll be in a pretty good position in 2 years. Let's both use that time to learn, talk with people, and grow some skills.

I'm of the mind that, given the communicative power the Web gives us, property management out of state is much easier than it was only a few years ago. In 2 years, with your cash on hand & still-advancing technology, it almost won't better where you buy & manage property.

I suggest doing two things:

1. Identify the markets where you want to buy.
2. Reach out to property managers, real estate agents/brokers, and other investors in that area. Ask for input (like you're doing now), but also make it clear what your goals are, and find out theirs.

This is what I plan to do as well. Haven't nailed down #1 yet, but if it helps, I'm considering lots of places. Oregon (most of the state, sans Portland proper), Washington's south and east, Indiana, Pennsylvania, and either Ohio or upstate New York.

Hope that helps.

Definitely get a contractor out there to look it over. Having some plumbing and wiring still in place is a huge timesaver...if it's all to code and working properly.

Code I think is your biggest challenge here. I don't know your local codes, but converting to a 2 unit shouldn't be too difficult if it's already zoned thus. In fact, what I would (in my amateurish opinion) recommend is:

1. Get the contractor out to inspect.
2. Talk to local code experts (including the contractor) about buying as a single-family now.
3. Buy the property, rent the first floor, move into the second floor, and sit for 1 year.
4. File paperwork to fully convert the property into a 3-unit multifamily. (This will take a while.)
5. Build out the attic apartment & make sure the meters are properly configured.
6. Enjoy the cash flow from your new multifamily!

Best of luck. Let us know what happens too; I'm curious.

@Janel Page Sounds like you're having a bang-up time there! Good to hear there's still deals in the area.

I like using Asana for pretty much all projects. It has great mobile apps, lots of ways to notify you, managing projects is drag-and-drop easy, and the pricing is great (starts at Free).

Hmmm...just a thought from someone looking at several markets (including all of Oregon) from a San Francisco Bay Area perspective.

I'm seeing lots of locals sell off their property here, dump the payoff in places like Portland, Seattle, Denver, and Austin. This is recreating the same phenomenon happening here - inflated prices due to bidding wars, overvaluing properties and spiraling out of control - in those areas. 

Sounds like it's hitting Salem too. That really is too bad. I honestly hope I'm wrong. I'd love to pick up some buy & holds in OR, WA, maybe a couple lower-cost places back east too.

This is solely my amateurish impressions.

First off, congrats on paying down the debts you do have. It isn't easy, but it is worthwhile.

Second, I looked into notes too. BP podcast #211 had Bob Malecki on to talk about them:

https://www.biggerpockets.com/renewsblog/bp-podcas...

He provided a good sense of what's involved. Appeals to me too.

Hope you're successful in shuffling off the office chains!

@Ken Min: Good question. No, I would not. I went to college because "That's what you did." Both parents did, grandparents, and so on.

I was fortunate to have grants offsetting part of the cost. But in the years since, I've barely used the degree. As many have said, it was just a box to tick on the resume. The investment was not worthwhile.

I've spent a fraction of the loan total on work-related training, books, etc. That was a much better investment all around.

Thanks to everybody who posted. I'll put responses in this post so I don't clog up everybody's alerts.

@Ken Min: I didn't actually know what "Subject To" meant until you posted it. Now I do. Very useful piece of advice.

@Jonathan Roper: If I could find deals like that around here, I'd have bought eight by now! Unfortunately, as Matt said, no such deals exist anywhere near me. The Bay Area is utterly obscene with RE pricing. Even a mortgage broker friend agreed, advising me not to buy anywhere in the region. Now, I also know guys who do deals and make money here, which is great for them. I just don't have the numbers for it.

@Matt Katsaris: I'm glad to look at OOS investments. Just not sure where I want to do that yet. I have friends in a couple of markets purportedly growing, but all of them tell me not to invest there. More research and education required.

@Steve Vaughan: The balance now is about 35% of annual income. I've paid on it a little over 10 years to get there. My savings took some serious hits in the past couple years (Dad died, had to help Mom get a new place). Otherwise the loan balance would be about 10% of my income and we wouldn't have this thread.

@John Spina jr: Sounds like you have solid goals in front of you. I've got a few years on you, but mine aren't so different. Hope you stick to it and come out in great shape later on.

@Joe Splitrock: Nice way to make a point.

I have a review coming up at work. Once that's past (I assume no problems), I will pay the loan off. Then divert those payments (plus a little more) into a separate account for real estate saving. By the time I leave the Bay Area, I hope to have enough in there to easily jump in!

Appreciate all the responses so far. Especially Ken's; your perspective is well-articulated.

Robert, you're correct, these are federal loans. They're sitting at 6.125% fixed, which is part of the reason I'm considering wiping out the loan.

I've seen some threads about paying down student loans vs. investing in real estate. Usually great material; par for the course here. However, I haven't come across one discussing my situation. So I thought I'd start one. If nothing else, it may help those in a similar situation at some point.

Prior threads have weighed the pros & cons of paying off a student loan (or a high-interest debt like car loans) in the short- to medium-term, vs. using that money to buy real estate. The question of time comes up, of course. How long until the student loan is paid off? How aggressive should you be? 

Here's my snag. I've saved enough that I could pay off my student loan balance NOW.

This came from several years of saving my income, and paying down the student loan at standard payment level. Wasn't a huge loan anyway.

I rent in a shared house, own an older car, and use a work-issued phone, so my expenses aren't too high. Job's not going anywhere. I own no property right now. The student loan is the only debt I have.

I could press a button and wipe it out (and still have about 3 months' expenses left in the bank). This would of course risk my ability to handle a crisis, leave me with fewer liquid assets, and negate my ability to buy real estate for a while.

Thing is, I wasn't planning to anyway. I have decided not to buy real estate in my immediate area (San Francisco Bay Area) due to the ridiculous pricing here. My income's OK, but not enough to sustain mortgages here if I have vacancies. The numbers I see just don't work. 

I plan to move out of the area in a couple years, and THEN begin investing. Or try note investing.

My question is: should I do this? Or just keep saving, pay the loan down over time, and buy real estate in a year or two?

Thanks everyone.