All Forum Posts by: Eric K.

@Kirky Galt, No doubt on the exit strategy! Im almost itching to sell my own property as inventory is flying off the shelves. The demand is there, but how is the affordability for the average joe? Im trying to understand how much longer this can keep going. Evidently longer than i thought. 

Who is John Galt? :) 

@Kevin Fox, I am currently helping a buddy of mine who has introduced me to the numbers of RE investing and really opened my eyes. He currently has 9 units in the lesser neighborhoods. Although the cash flow and appreciation is great, we still have had to evict on numerous occasions. Margins are getting very tight as the competition is getting absurd.  I'd love to hear more about some of the deals that have come across you desk. Still would like to have investing in SD work out. As you pointed out, its always best to have it local, and have much more control over the rehab and management.   

@Ken Vingua, The deals that I was going after would allow me to pull a good chunk of funds back out during refi, but never getting close to 100%. This is why I would have to wait a few years to "repeat". 4 years of cashflow would be what is needed to get all the funds back into the account. 

I'll be very curious to know how your 4 properties will unfold. If you come down the 5 occasionally, give me a shout and we can grab a beer. I live just on the other side of la jolla. Best of luck! 

@Account Closed I'm on the same page! I can pull off one multifamily in a rough neighborhood here in SD, but that would wipe out all my liquid finances for a few years (which still may not be a bad option to have a first rental locally). Also not naive enough to believe that the market will keep this pace. I've been a day trader in a previous life, and there are plenty of examples of stock charts that go vertical, but they all come crashing down just as fast as they went up, usually over-correcting, before going back up again. The case-schiller looked no different during the last runup. 

Also agree about Illinois. Love Chicago, but just the taxes alone would deter me. Would you be willing to share some of the other locations that have treated you well in the midwest? Is AZ currently overpriced for the rent?      

Hi BP Family, I've been reading through the forums for over 4 months before posting for the first time. I am originally from Chicago, and have been living in sunny San Diego since 2007. The wife and I have been fortunate to purchase our first SFH in 2010, and needless to say its appreciated to ridiculous levels.

Based on reading countless posts and BP podcasts, I've decided on the BRRRR strategy as the best approach moving forward with RE investing. I wanted to ask the experts here on BP (yeah I'm talking to you!) on your opinion with buying a multifamily property (2-4units) in San Diego, vs buying several multifamily properties in a less expensive area. The initial goal would be to maximize cash flow, with a target of $500 per door. Since I'm familiar with the Midwest area, my first thoughts would be to consider that as the less expensive option, but im always open to suggestions.

San Diego

PROS: High cash flow and very high appreciation. Population growth. Low vacancy. Rapid rent increases. Local, and can rehab and self manage initially.

CONS: Difficult to scale and will postpone purchasing additional properties for a few years. Neighborhood would be C/C-. Likely tenant issues associated with neighborhood. 2% rule would be between .8 to 1%.

Less Expensive Area (example Midwest)

PROS: High Cash Flow. Easier to scale with multiple properties. Neighborhood B-/C+. Presumed more dependable tenants. Contractor network already in place. On paper, 2% rule looks possible. 

CONS: Low to no appreciation. Population flat or declining. Slow rent increases. Higher vacancy rates. Need to remotely manage or hire property manager.

Would love to hear your thoughts, and what YOU would choose. 

Thanks,

Eric