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All Forum Posts by: Matt K.

Matt K. has started 11 posts and replied 3834 times.

Post: Tough Decision whether to sell my one unit and buy more

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

This kind of money has some good weight behind it in other markets....granted you might not see the same $ in appreciation, but you'd see far far far more cash flow.

I went to KC, could make a long list of logical reason why and happy to if you wanted to chat....but have some creative ideas for you.

You could do some multi family or portfolio, like everyone does...or scale it down a bit and add in some STR. I'm in the process of converting a long term rental and doing nice remodel to make it stand out. The short term numbers make sense and worse comes to worse I could always convert it back...

You could do the above and balance it out with some REITs to lessen the landlording.

But here's the crazy idea, you could probably do a full B&B or botique hotel. I mention this because seems like you enjoy hospitality having owned a bar. There's some pretty cool ones in KC and they wouldn't be terrible to replicate cost wise.

Post: Buy and Hold or 1031 into larger building

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Brendan O.:

I have some properties in an average neighborhood that i developed into large apartments some with five, six or even seven bedrooms . Some are rented by the room so the work involved is becoming too much. I am a buy and hold investor and undestand the long term benefits. I don't want to look back and say damn i wish i never sold anything. 

My questions is If i sold all  these properties and done a 1031 into a single building of approximately the same total value in a nicer area would that make sense? It would be far far easier to manage. 

Have you considered going out of state? You could 1031 into some pretty good sized Midwest deals.... 

You could also do a combo of new properties and some REITs to balance the level of hands on effort.

I went out of state on a small 1031 deal, was intimidating at first but looking back was a good experience and has gotten easier once the right people in place.

Post: NETWORK AFTER WORK- ANYTHING ABOUT REAL ESTATE

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

I might be able to swing by for a bit... 

I only sell stuff when I have a clear plan with how I can use the new funds to make more then I was with the old funds...

Post: Where would you move to start building your real estate empire?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Nadine O.:
Quote from @Travis Biziorek:
Quote from @Nadine O.:

Hi BP Family! Where would you recommend living in USA to start house hacking and building a rental property business? The intent is to relocate from a high cost of living area like the Bay Area in California (although we love it here) to another, lower cost of living city where we can start by purchasing a multi-family to house hack (we are newbies, but have read a lot) and eventually build a portfolio of rental properties to retire off of. Would love to hear your thoughts - thank you!


Nadine, five years ago my wife, oldest son (not quite 1 at the time), pup, and I sold our Walnut Creek townhome and intended to move to Ann Arbor, MI. We wanted to get into real estate, eventually, but that's not why we moved. We wanted a lower cost of living so my wife could stay home full-time and focus on being a mom.

The housing market in Ann Arbor was too crazy for us and we started getting that Bay Area vibe with things going $60k-$80k over ask. We figured we'd just up our budget, which we could afford to do, but then realized we were falling right back into what we were trying to escape. So we began looking elsewhere.

We decided on Metro Detroit, specifically Troy, MI. The schools were a big draw for my wife. We liked being near a large airport, big city for culture, etc. And the housing wasn't like it was in Ann Arbor. We bought our 3,100 sq ft home for $460k, did a bunch of renovations on it and then decided we'd get into real estate investing.

Everyone told us not to buy in Detroit proper. 

"STAY IN THE SUBURBS", they said.

The thing is, the masses are almost always wrong. I started investigating Detroit. In 2018 we drove some nearby neighborhoods not quite in Detroit proper. I specifically remember our son in the back seat as we headed down to Allen Park and Redford. Ultimately, in 2018 we decided we needed more capital before pulling the trigger. We really didn't but we didn't know any better. I wish we'd gotten started then.

But about a year later in 2019 we got a HELOC on our primary (appraised for $550k) and took out a loan against my 401(k). We bought our first rental property in Detroit in April 2019 for $40k. The tenant was paying $750/mo but not REALLY paying. We got two months out of them before we had to evict. Then we put $15k into cosmetics and rented it for $950. Today the home is worth $120k and rented for $1,200/mo. PITA is about $250/mo :-)

We now have 10 doors in Detroit proper (NOT the suburbs) and they have been extremely good to us. Most of these houses we were able to BRRRR. The ones that didn't quite make it have already paid out their capital. We could refinance everything today and pull out about $200k in equity. And I intend to soon but we can't do that quite yet...

This week we are putting our primary residence on the market and heading back to California. SLO to be exact.

My wife never thought we'd be able to afford to move back. I had friends tell us we'd never be able to afford to move back. But we are.

It's been a journey and it hasn't been easy. But know it can be done and the place you move doesn't have to be your forever home. You can leave with a mission to build some serious wealth and then move back. Don't let people tell you any different.

Let me know if I can be helpful and good luck!


Travis - thank you so much for your story and great job on your success! I have looked into Detroit, MI and that is one area on my radar (in addition to Grand Rapids, MI).

I feel the same way, I love California and if we were to relocate - just like your journey -  we don't have to be there forever. We could relocate, reduce our biggest expense,  be more hands on with our investments in a lower cost area which could possibly help us scale faster (maybe or maybe not, which is why I am seeking out help from those who have succeeded in this) - then, if we aren't 100% happy we can come back. 

I agree with you - normally you don't want to follow the masses. Appreciate your time to share your journey and best of luck to you - welcome back to CA!

Cross country moves are expensive, moving across the country 2x could be down payment on another rental.

If you put in the effort you can get a cheap rental in bay area from long time landlord. Combine that with out of state rental(s) it'll reduce your actual living expenses quite a bit. Then you can focus on finding a primary here in CA at good price that'd you make money on or big chunk of equity.

Unless you know what your doing from a construction point you don't "have to" be local or hands on to your rentals. But it's extremely valuable to have a local level of knowledge and network.

And some numbers....
its about 12k right now for just a moving truck to KC, that's not even counting fuel and 2 hotels as it's a 24hrs of driving.

All said and done, that's about 15k to get me to KC doing it by myself. Add in the security deposit, first/last month rent, and random crap I'd need to get settled in temp spot in KC I'd be damn close to a down payment on investment.  It'd also take me quite a bit to make up probably 20k by time it's all said and done just to make the move.
Quote from @Fareed Fityan:
Quote from @Steven Kunkel:

@Fareed Fityan I don’t see why you can’t provide a “Notice to Quit” with a 30 days notice (Maryland requirement), if you don’t want to go down the eviction process.

I spoke with a lawyer and they recommended I speak with my tenant and if she doesn't plan on moving out I would have to start an eviction process once the eviction moratorium ends. Luckily my tenant informed me she will be moving out so I hope nothing changes.
Hope that's in writing, probably won't help if it went to court but no downside...

Post: Where would you move to start building your real estate empire?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Justin Thorpe:

I built mine in the bay area and that started in the depth of 2000 recession. My reasoning was simple, if I could win here and build a portfolio in this area, I could afford anything anywhere. I am not sure if an investor looking to start things today should do it any differently. 

I almost went that route, I was in a 1031 and tried over and over to do a condo in Oakland. Couldn't land anything. Then went to KC was able to be much more agressive and was able to land something there. The other option was an off market property in Vallejo, but as new landlord I wasn't ready to manage something like that and the costs would of put more strain on me to operate.

But you your point, had I done that I would of made some crazy appreciation....

To me, I focused on reducing my living expenses in California because I like living here. That started with renting in CA and buying out of state. It then allowed me to buy my primary here and still tap into equity, but if I used all my funds to get the first CA property it'd of likely been more difficult/slow to scale and get a primary because of 1031 rules.

To me at least, seems like the best approach is finding a primary in CA that makes sense that could either be converted to a rental and or sold off. HELOC temp solution, then you get the sec 121 exclusion and if you did a rental you can combine it with 1031 as well and at that point you really have funds to scale up.

Post: Where would you move to start building your real estate empire?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Nadine O.:
Quote from @Matt K.:

KC, short flight if you get direct and central time makes keeping in contact with both coasts easier. Yea it's only one hour difference then east coast, but you'd be surprised when that's helpful. KC also has a strong and diverse economy with good jobs which can be important if you're making a permant move.

But here's the thing, CA property would give you better chance of some meaningful equity from a funds standpoint. Doesn't need to go up much % wise to have a HELOC that would be a good tool for an out of state property. Midwest property might get you a bit more % wise, but the lower price points just mean less funds to deploy because no one is paid in percentage points.

I'm local to you, rented for a long time because it was better from a price standpoint then buying. I took the down payment money and bought a rental in KC that helped offset my living expenses...then a cash out refi to scale up...was slow but I don't chase doors I went for higher return vs door count.

Now it's coming full circle, using a HELOC on primary that I was lucky enough to get before COVID...which in theory would lead to me being able to improve my first rental and get another HELOC and then use that to improve the others and you guessed it another HELOC ...to then pay down the primary.

Happy to chat more if you'd like.

 Matt - that is great to know and good for you! Yes, wish I had pulled the trigger on real estate pre-pandemic for sure. 

I will definitely reach out to chat more. 

How passive is your investment in KC while you live in CA? Do you have to fly out there a lot?

I will look into that region as well. 

Passive is a hard thing to define...
First, I self manage them...second I'm likely a lot more hands on then other people and a bit picky about how/where my money is spent.....

So with that said, 2 of them are pretty passive. Few issues have come up, few maintenance items were a struggle but really it's limited. Would be really hands off if I let a property manager do it. They're in a HOA so lot of stuff is taken care of, but at the same time I aslo have a bit of extra effort to ensure I don't rack up violations...but it's basically on auto pilot now.

The other property was way more of a challenge. Higher price point = more difficult tenants from a needs basis as the expectations are higher. The property is actually two separate units so that added another layer...a basement and older property yet another layer.  If you weren't picky and just wrote a check then it wouldn't be terrible and just let a property manager handle it....

I go out there a few times a year, more because I want to be then have to. Only time I really "had" to was an eviction while self managing and I did so to show up in court and demonstrate I'm a real person. Even that wasn't a huge deal, got flight night before and hotel... Fly back the next day if I wanted but I took extra time to check in with the Network I have there.

The thing that no one talks about though is this... There's plenty of people who will take your money and handle things for you. That comes at the expense of money out of your pocket, nothing wrong with it as everyone needs to make money to stay in business.

The struggle comes when you want to be more hands on...you need a way to build those relationships. That comes one or two ways. You either have enough work to keep them busy or...you market them and keep them busy with your referrals, HIGH QUALITY referrals. This way you stay top of mind and they stay busy.  The biggest challenge I had was finding those people, it's even more so with out introductions. Introduction speed up the process, but you still have to manage that relationship. Building and growing my network takes more time then managing my properties, but my network is what allows to be successful with my properties.

You don't need to live somewhere to invest somewhere. You just need to be active in that community and understand what's going on (like you actually lived there)


Post: Where would you move to start building your real estate empire?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

KC, short flight if you get direct and central time makes keeping in contact with both coasts easier. Yea it's only one hour difference then east coast, but you'd be surprised when that's helpful. KC also has a strong and diverse economy with good jobs which can be important if you're making a permant move.

But here's the thing, CA property would give you better chance of some meaningful equity from a funds standpoint. Doesn't need to go up much % wise to have a HELOC that would be a good tool for an out of state property. Midwest property might get you a bit more % wise, but the lower price points just mean less funds to deploy because no one is paid in percentage points.

I'm local to you, rented for a long time because it was better from a price standpoint then buying. I took the down payment money and bought a rental in KC that helped offset my living expenses...then a cash out refi to scale up...was slow but I don't chase doors I went for higher return vs door count.

Now it's coming full circle, using a HELOC on primary that I was lucky enough to get before COVID...which in theory would lead to me being able to improve my first rental and get another HELOC and then use that to improve the others and you guessed it another HELOC ...to then pay down the primary.

Happy to chat more if you'd like.

Post: What To do With 1st Investment Property-- Opinions / Advice?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

It's late, I haven't looked at this stuff in years because I went out of state... But, looks like CA and Oakland might make this possible, if not even easy

https://www.oaklandca.gov/reso...

I think you could even convert the garage of the single family into an adu...and again Oakland seems to like ADUs

https://www.oaklandca.gov/topi...

Now money wise...I've been on a HELOC kick, understand the risk and know that it's a tool...but I love the fact that I can recycle the credit like over and over as I pay it down vs a traditional mortgage.