All Forum Posts by: Clifford Tran

Update:

I ended up going with a cloud brokerage that takes a comparatively minuscule cut of my commissions. (In my excitement I mistakenly prepped for the broker's exam and was surprised on test day with the salesperson exam instead!) For most people this will probably be the best compromise to start. Downside is you will get very little training, resources, or leads - so be prepared. I feel like most of those things are overrated though, and if I were to start off running my own brokerage the amount of work would be about the same or more.

I would like to move into property management as well and my current brokerage doesn't support that, so I might end up establishing a cloud brokerage myself in about a year that allows other agents to engage in property management activities in CA. To my knowledge this type of company does not yet exist.

Word problem of the day:

If a township is 36 sections, and a section contains 260 hectacres, how many acres of residential housing exists if half of the sections are zoned RD-5, one-quarter zoned AR-2, and the remaining zoned BP?

Seriously though, there is some info that is only really pertinent to developers, surveyors, or appraisers. You will not likely be using this knowledge regularly if you are doing residential sales in an urban or suburban area. Agents in rural areas or doing commercial will probably find these tidbits helpful.

In terms of what is VERY useful to all agents: pay special attention to contracts and how mortgages work. You will be dealing with those two things all day long.

Good luck!

Way to go, Eric. The only thing better than starting rich is starting early.

I started out at 24. I'll tell you now, investing in your 20s is a lonely experience. 99.9% of your peers will be absolutely uninterested in talking to you about RE because they think that's something they're supposed to be worried about when they're "real" adults.

Once you get toward 30 you'll be surprised how many people hit you up for advice because they've finally matured up and you've blazed the trail first. And those friends that concentrated on their corporate careers instead of business can ultimately be a great source of private funds too.  :)

Like these other BP guys are saying - keep going, don't stop. You've starting running the race that some people don't even know they're in.

Information overload indeed. There are as many ways to play with real estate as there are ways to get from LA to NY - which is actually how I think of investing. 

BRRR is one of many roadmaps that can be used to get you where you want to go. Every book and every blog post is just map of a very specific stop along the way.

The the sake of simplicity, think of what kind of road you want to drive on. Do you want to do a lot of off-roading (DIY rehabs) or do you prefer to drive fast and furious on flat pavement (turn-key rentals)? 

In the end, choose the path that seems the most fun. Not "interesting" mind you - I mean FUN. It sounds a bit immature but if you don't find it fun no amount of analysis will justify you staying with it. And staying with it is the part that counts.

I have a friend who is in the same position you are. He's been pushing to buy, the wife is always pulling back from the edge. I had the same debate with my wife who was reluctant to believe in real estate investing when I started as well.

From a marriage perspective I would say that having your spouse agree with you on these big, long-term goals is more important than actually investing. If you force him to agree it's possible that he will feel resentful and blame you for potential financial setbacks. So I would play the inception game and constantly expose your husband to the ideas of investing until he either gives you a hard NO or buys into it on his own. 

Later is better than never.

John's spot on. If you've got the bandwidth to carry this project and the analysis backs the potential rev I think you'd be golden.

One more thing - how long ago where those other malls built? I would check the construction costs in your area because the other guys might turn a profit but if construction costs have increased you might not.

Hey Cody,

I got started with house hacking and my general advice is to cashflow as soon as possible. Doing renovations whether by yourself or with a contractor can be fine if it's adding big value to the property but often it becomes a time/money pit. For your first property I would stick to a nice turn-key place. Either multifam or house hack will work because they function practically the same if you use it as a primary residence. You can always play around with rehabs later once you have some nice cashflow to back you up.

Also, since this will likely be your 1st prop, use as little cash downpayment as possible. Yes, it will be more in interest overall but when you're starting out you need as much cash-on-hand as you can possibly save to grow your business.

Good luck bro!

I house hack all the time, bro, but the principles of good investment still apply. 

You've got to think about the price to rent ratio whether you live in it or not. I play ball in the Bay Area and I'll tell you that rarely will you find a good price/rent ratio. The prices are just too dang high for you to hope for anything better than breaking even. Unless that's your only aspiration already :)

I think what you're trying to get at is you want to make that sweet, sweet Bay Area salary and subsidize your living costs at the same time. This isn't a true investment vehicle and they only way you can think of it as one is if your strategy is to bet on appreciation and dump out your equity in a few years to buy a *real* investment in a more favorable market. 

Like a few folks have already figured out I've got my bets on TX - probably Austin or Dallas. The only thing more important than having local talent is being able to attract non-local talent based on low cost of living and family-friendliness. Silicon Valley and Seattle folks know what I'm on about. If they announced HQ2 in Austin today I'd be on a flight there next week and I know more than a few of my tech industry friends won't be too far behind.

In general it's wise to follow the big movers and shakers like Amazon. I bet on a Amazon distribution center and been rewarded with high occupancy and accelerated appreciation. In fact one of my tenants was a construction manager building the distribution center.

If you can't beat 'em, join 'em.

Really cool story, man. I'm 26 and started down the same path as you did maybe 1 year ahead of you. :)

The big difference is that I have a family and decided to let my wife leave her job to focus on our properties and stayed on the W-2 job myself. Totally get your point about leaving a salary job with mediocre pay. I think some of the other guys that advocate for you staying with a salary job assume that you can make a good salary and are very upwardly mobile on the corporate ladder. This is true in my case and so it helps me look good to the bank on paper to qualify for business loans.

For us young guys shifting from white collar jobs to RE investing the "bank doesn't loan without W-2" problem is real so you might find that could inhibit your ability to pick up more assets quickly. My solution to that - probably applies to you as well - is to bank on fast appreciation of your current assets. Mine are in CA so the market gives me equity I can borrow against relatively quickly compared to most places. If you've got property in hot markets this might be the easiest way for you to pull funds to move forward. Partnerships are nice to explore but every investor knows it often doesn't work as well as it's advertised.

Some care about the big money and some for the freedom. It sounds like you'd rather have the freedom first and I can't blame you for that. :)