Why Louis Chose To Invest in a Rental Home Over Purchasing a Primary Residence in California

Louis was first introduced to Doorvest by one of our team members. He enjoyed the concept of our product so much that he invested in Doorvest through WeFunder's Community Round. Louis recently moved out of the Bay Area to Davis, California, hoping to save for a primary residence. Now, working remotely as a Data Scientist at Socure, an identity fraud verification company, and living at his parents' in a lower-cost-of-living area, he has saved tremendously for a downpayment. Instead of using it for a primary home, he invested in a rental property through Doorvest.

Doorvest is built to advance financial security for all. We are ecstatic to see how a superfan turned into an investor, and now a customer and homeowner. Not only is this a testament to how much our investors believe in our product, but every day where we can help someone have direct ownership of an investment home is a day we get closer to democratizing financial security for all.

Enjoy our complete interview with Louis below!

Why did you invest in real estate?

I've always wanted to invest in real estate just because it's always good to diversify your portfolio outside of just not stocks, cryptocurrency, ETF, or even your employer's 401K. Real estate investing also has a lot of tax advantages, especially in a high-income tax state like California.

Why did you choose to invest through Doorvest?

Working a full-time job and day trading, I was spending too much time and effort searching for the right market and a real estate agent that is knowledgeable and trustworthy within this market. I had to consider: what is my goal with real estate investing? Am I looking to buy a primary residence or looking to invest? How can I effectively communicate and trust the broker/agent to find what I am looking for? There was so much consideration that I lost the motivation to do this myself. Doorvest was the platform for me to get into the real estate investing space without too much effort.

How did you hear about Doorvest?

I was referred to Doorvest by a friend (a team member at the company) in late 2021. Doorvest was raising funds through WeFunder at the time, and since I like what Doorvest is doing, I invested some of my money into the company. From there, I learned more about the product, and one thing I love about the product is the UI of the Dashboard. I'm very analytical, so seeing how clearly everything is displayed and how nicely visualized the home performances and calculations were, it boosted my confidence and trust in Doorvest. It wasn't hard to convince me to submit a deposit and begin receiving exclusive homes that match my investment strategy - no matter how much it was - because the deposit is fully refundable if I didn't like what I received anyway.

How did you save for your downpayment?

I saved approximately 25% of the total cost of the property - that's around $60,000-70,000 of $255,000. I used the "pay yourself first" rule and saved paycheck by paycheck through my full-time salary. I would pay any credit card debt first, then put the rest into a 401K account (matched by my company), Roth IRA account, and savings accounts. I used an Amex high-yield savings account, which was 1% APY at the time. I also have a SoFi savings account because I used to work there, and I would split my cash savings between the two accounts.

My initial goal was to save $100,000-200,000 to buy a house in California. I would allocate more cash to my savings to achieve this goal. I'm not particularly eager to sell my shares to get cash because I will be taxed on a short-term capital gain.

How long did you save for a downpayment?

I was able to save pretty quickly. Despite my lifestyle of enjoying travel, it took me a year and a half to save roughly $70,000. This was made possible by moving out of the Bay Area and saving more than 50% of each paycheck.

From purchasing a primary home to investing in a rental property through Doorvest, what made you change your mind?

I initially wanted to save for a primary residence in California. I looked for homes in expensive areas like San Jose and Orange County, and the inventory there ran from a minimum of $800,000 to over a million. Saving $100,000 for a downpayment isn't the correct math here, but I wanted to build upon a downpayment to buy in California one day. Also, primary home or investment home - I do need a downpayment regardless to get the best rate.

I also didn't have enough time to search for a primary home actively. I also wanted to walk the property in person (whether in the Bay or LA); flying or driving for 7 hours from Davis was not worth my time. So I redirected.

I deployed my capital into an investment property. My goal with a Doorvest investment home is to build enough passive income and equity where I feel comfortable enough to purchase a primary residence in California.

What was your investment strategy for owning a Doorvest home?

I went for a balanced home. I wanted to net positive in cash flow and gain equity from the home appreciating over time.Also, the fact that Doorvest is in high-growth markets like Texas is a green flag for me.

I went for a single-family home with 3 bedrooms and 2 bathrooms as they are resilient to hold for the long run. The Doorvest Client Partners team also helped me define my preferences. As I couldn't inspect the homes myself, Michael from Client Partners, showed me what to look out for. For example, he pointed out the type of remodeling that was being done on my property and how having an extensive remodeling can limit my long-term repair costs. Despite the initial high construction cost, investing in high-quality fixes will minimize my maintenance cost in the long run.

I prefer to keep the address private but am happy to share what my Doorvest rental home, post-renovation, looks like: