All Forum Posts by: Michael Strachan

I agree with @Frank Wong about the incredible opportunities that exist when it comes to out of state investing. However, I would also challenge you to think about how you can own your primary residence in a way that doesn't completely end your dream to own rental properties. If you haven't read up on house hacking, I strongly encourage you to do so. While our market is definitely challenging to enter, you need to take in to account the amount you are currently spending on rent (paying someone else's mortgage for them). If you can purchase a duplex for example and live in one unit while renting the other and generate enough income to get the monthly mortgage payment out of pocket to be less than or equal to the rent you're currently paying, that would be a huge win. That way every payment goes toward your equity in your own home rather than someone else's. Of course there are other factors to take in to account as you'll be responsible for maintenance, property taxes, vacancy, etc but the point remains. The high prices in our market are a barrier to entry but that also means that over a long period of time you could find yourself sitting on millions of dollars in equity for simply paying the same amount you would have as a renter. Good luck and happy investing!

As most people have said, you definitely want to be working with an agent who does business in that area as they would have a ton of knowledge that would be specific to that local area. For instance I operate primarily in Santa Clara county and Alameda county. Santa Clara is what we call a seller pay county, meaning that it is customary for the seller to pay the title and escrow fees. Alameda is a buyer pay county. If I had a listing in Santa Clara county and received an offer from a buyer's agent who wrote in to the contract that the buyer would pay those fees, because that is customary in their local area, I would immediately know that this agent isn't familiar with my market and leverage that in my negotiations with them. Not to mention that I would be more than happy to allow them to pay my seller's fees as they so graciously offered. This is just one of many examples of what we see in the industry and why you wouldn't want to work with an agent who doesn't primarily do business in that area. If you would like to talk shop feel free to reach out to me and I would be happy to grab a cup of coffee. If you just want a recommendation for a realtor in another area, my company has a phenomenal relocation team that can connect you with an expert in that area. Good luck and happy investing!

As with any real estate professional, I recommend that you speak with as many lenders as it takes for you to feel comfortable with the person you'll be working with, whatever that means to you. Maybe there's a lender that you feel could even do great work for you but you simply don't get along with them or your personalities don't match up. Remember that you're building a team of professionals that you can trust and feel comfortable working with for multiple transactions, not just waiting out the couple of months and dreading every phone call with the person along the way. Especially as a first time home buyer, you want to work with someone who is willing to take the time to answer your questions and help you understand the process rather than insisting you simply trust their expertise. The same goes for any agent, inspector, lender, etc that you may be looking to for professional services in the future. I would give the same advice if you were looking for a primary care physician, dentist, or life partner. When it comes to the important stuff, don't settle for the first thing that comes along. Good luck and happy investing!

Hello Cody,

I am a realtor local to the bay area and I would be happy to offer my services and network to help you get started in our market. I'm curious what it is specifically that you're looking for in an agent when you say "investor friendly"? I find that every investor seems to have a different idea of what that means.

I agree with @Frank Wong in his analysis of our local market. True cash flow is hard to come by around here and the majority of your gains will be made through appreciation. Also, education is everything! that said, if you want to have a good place to start, I would definitely recommend looking into "house hacking" if you're not already well read on the topic. It can be a great way to get that first property under your belt if you don't already own your primary residence because it allows you to greatly reduce, or in some cases even eliminate, your housing expense every month (although the latter can be hard to come by in this market) all while benefiting from the other wealth-generating benefits of real estate investing. Especially if you have that fear that you talked about, which tends to come from a lack of confidence due to lack of education and experience. House hacking is a great way to get your feet wet!

It sounds like a second opinion would definitely be a good idea. Your agent should be able to provide you at least a general overview of what you can expect given each course of action (fix up and sell vs. sell as-is). In general, I advise most of my clients to sell as-is (especially if they have no experience making repairs) with a few exceptions like just making the home more attractive before going on the market. This is of course highly dependent on the individual property and you shouldn't take any advice from anyone who hasn't at least seen and become familiar with the specifics of your home. Our local market is at such a high price point that many buyers out there are looking to buy a property that's a little bit run down with the hopes of fixing it up themselves to their own liking. The last thing you want is to spend $100K fixing it up and the buyers decide to gut it and do a total remodel anyway. It generally saves quite a bit of headache to sell as-is because as you said, our local area is in such high demand as it is.

 That's great! Keep at it and you'll be shocked how quickly you become fluent

@Gabriel Nguyen Congrats on taking the first step, which is taking the time to educate yourself. I do think that out-of-state investing can be a highly profitable strategy, but I definitely agree with @Account Closed in that it is certainly a good idea to at least educate and familiarize yourself with your local market. In my opinion, that's the best place to start for a new investor just because it's more "real" in the sense that the properties are very tangible to you because you could drive by on your way to work, etc. Even if you decide to invest elsewhere, being familiar with your local market will allow you to network and communicate with other professionals near you much more easily. That said, if you are interested at all in out-of-state investing, I strongly recommend David Greene's book, "Long Distance Real Estate Investing". I'm a realtor in the Bay Area so if you have any questions about our local market, feel free to reach out! Good luck and happy investing!

I would LOVE to attend this event but sadly I'm unavailable that day... Any chance it will be recorded?

One thing I think you should be trying to avoid is justifying a home purchase for personal comfort by passing it off as a wise investment. It's completely okay to make the conscious decision in favor of providing a desirable lifestyle for yourself, but make sure if you're doing that, its for those reasons (or whatever the "right" reasons are to you). While equity is nice to have from a net worth perspective, it really isn't a wealth generator unless you are leveraging it in some way. I would also keep in mind that cash flow in the present is more valuable the earlier in life you earn it so long as you're investing it wisely. Ultimately, you should make the decision that best moves you toward your goals and desired lifestyle. Just be fully aware and informed on the opportunity cost of that decision.