Here is my situation. I am located in bay area calfornia, where real estate is very expensive with low Cap rate and high GRM. I have great credit score but I left my engineering job sometime ago. I do have some savings which would be more than enough to invest in other states but not much in where i am living. I don’t own a house now and live in a rented apartment. Really want to get into real estate investment, but want to hear people’s opinion about where and how to get started with my situation.
From what i have read in this forum and REI books, I kinda like the idea of investing in apartment buildings for long term wealth building and rehab/flip for short term cash gain. And I hope I can do it as a full time career. But as a beginner with no experience and no mentor to help, i admit i do feel the “FEAR”. Properties are too expensive and have been fast appreciated for years in my local. So the risk is higher. Anybody has similar situation? How do u get started and how are you doing so far? Do I have to go back to a job for income and qualifying for loans , then start small in state like texas or ohio? Or i should try hard to gather a team to start with local rehabs? Anybody knows any good RE clubs in san jose area?
Sorry for so many questions. Thanks a lot!
Note: I have talked to several lenders/reators. And they do suggest me to get a w2 job for the loans even i have good savings and credit score. Then qualify loans to buy a local home first. Maybe a fixer upper or 4-plex, which will pretty much eat most my savings for down payment & repairs, and big negative cash flow for sure. Love to hear if there are other voices.
Dennis
Dennis,
If you are serious about doing REI full time and your local market isn’t suitable, then I’d suggest that you move to an area where the market is good. That may not be an appealing option to you, but that’s what may be needed for you to be successful. You do not need to go all the way to Ohio or Texas to invest, there area limitless number of areas where you can invest. As someone else posted recently, just think of the “RED” states (republican states) when you’re thinking of investing.
You do need income if you want to get loans consistently, so back to the job! It will take at least a couple of years to get established in REI and make enough money to do REI fulltime. It can be done, if you’re willing to do whatever it takes to make it happen.
Good Luck,
Mike
Or you could locate a birddog or other investor in an area that you would like to invest in.
I am currently birddogging in Tulsa, OK where $100,000 can get you 2-4 properties to fix and flip and $300,000 can get you an empty 11-unit building. :o Recent initiatives taken by the city council are making Tulsa very attractive to investors.
From what I gathered, there is no such thing as a bad place to start. You just need to find someone who is willing to sell for undervalue. People get divorced, die, transferred, etc all over the country and not just in one specific area of the country. Sure the prices of the realty may be more expensive but thats relative to income usually from what I gathered.
Am I wrong?
I have bought properties at market value that have cash flowed VERY Well. Now they are worth well more than when I paid FMV. So it’s all realtive so long as you don’t forget the positive cash flow.
Jeff
Im just getting started in REI and this is how Im getting started…First I found an Realitor who would love to help a newbi get started, thus being my conection to the inside of the MLS, DO NOT SIGN UP FOR ANY ONLINE LIST OF FORCLOSURES, second I put a plan of action together or ways that I could invest and make the most money possibale…Im not looking for long term equity but cash right NOW…first thing Im going to do is buy a home for say 65k 3,1,1,(FMV) with an intrest only loan and put it up for rent to section 8 tenants, owners have some say so in who rents even if its section 8 here in texas…so 65k say 7% intrest, remember I/o loans have higher rates, and I finance it for 5 years arm over 30years the intrest payments would be around $379.00 and the going rent in hud is about 900 for a 3,1,1 but even if i only get 700 a month thats a cash flow of 321 minus 100 for say insurance and taxes +cash flow of about 220 is my goal per property and if i do this 10 times thats 2200 monthly cash flow the second thing is to buy a forclosed home at say 20k that only needs say 20k in repairs and hold for rental income using the same stratigy as before this property would cash flow a lot more, and the other thing is to buy forclosed properties and fix and flip…just a little insight of how im getting started hope it helps
i’m an engineer in San Diego. I just sold all 4 of my properties here and I’m investing in utah, boise and now the midwest.
the current market in CA is not conjucive for investing along with my fulltime job. i’m buying preconstructions in utah and boise and i can hook you up with my group. i strongly suggest reading the books and blogs listed in my signature and “lurking” on message boards like these.