First Home Buyer in Long Beach, CA

I've been renting for the past 5 years in So Cal. I'm 27 and moved here just at the start of the housing boom. I have been priced out year after year as my savings were continually not enough for a down payment on an ever increasing home. :violin: I know, what a sob story right? =)

FINALLY I've been able to save a bit of money and the value of properties are dropping into non-idiotic ranges here in the LA area. YAY! I feel this is a good time for me to invest.

Specifically I've been looking in the Long Beach area due to affordability and proximity.

I'm here to learn and share information that I have learned. I do own a couple rental properties with my parents back in Indiana that make ~$40 a month profit (woo hoo). My goal is to acquire properties in need of some work, fix em up, and rent them.

A couple questions I have for you guru's are:
1. Would it be better to buy my first home, live there and have roommates help me pay my mortgage, or should I keep renting and buy an investment property with my savings?

2. Am I eligible for first time owner programs like CalHFA even if I own two properties in an LLC with my parents? And, even if I am, would you recommend using those programs given my strategy of buy/hold/rent?

Edited: 06/26/2010 at 04:59AM

Dan Haeck

Real Estate Agent · Pittsburgh, Pennsylvania

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Apr 03 '08, 05:06 PM

If you know and like the room mates then that is the option I would suggest. I remodeled and rented my basement out to friends for the first 7 years in my first home. Any time you can use someone elses money, you should. It helps to have a private entrance and area though so you have your space.

Edited: 06/26/2010 at 04:59AM

Kevin Schick

· California

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Apr 03 '08, 11:39 PM

Welcome Raiz,

I have no idea what the prices are like, but I lived in Long Beach for 15+ years over by Redondo & E. Stearns. There is a pocket of duplexes on Euclid and Grand that I always thought would make a good opportunity to live in 1, and rent the other side.

Also where in Indiana are your rentals? I have some in Indiana as well.

BMR

Edited: 06/26/2010 at 04:59AM

Lucas Cookson

· Torrance, CA

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Apr 03 '08, 11:51 PM

djh55:
I don't know who the roommates would be yet. I have a lot of renting friends, but most of them live in the hermosa, manhattan, and redondo beach areas. I doubt they'd want to leave their little apartments in those beach citites to move to Long Beach.... so I'd have to find new roommies.

The place I'm bidding on does have a private entrance though.

BMR:
I'll have to check out those duplexes. It seems like every other house is for sale in some areas of Long Beach, so there's a good chance one is available.

My properties are in a small town called Decatur, Indiana. It's about 15-20 minutes away from Fort Wayne. It used to be a predominantly white area with few rentals, but in the last few years there have been a lot of hispanics moving in who are more inclined to rent, so my parents and I are buying up the available homes one at a time and renting them out. The cashflow is positive, but also quite small.

Edited: 06/26/2010 at 04:59AM

Kevin Schick

· California

58 posts
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Apr 04 '08, 05:33 AM

There are a couple available. If you go to realtor dot com and search for multi-units in 90815 zipcode. Pretty wide range in price.

I have a duplex in Huntington outside of Fort Wayne, that has done well.

Again, welcome to the group ...

BMR

Edited: 06/26/2010 at 04:59AM

Will Barnard

Rehabber · Santa Clarita, California

Donor Pro

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Apr 04 '08, 05:37 AM

Raiz, why would you purchase properties to hold if the cash flow is so small? Buy where you get cash flow in excess of $100 per door. That should be your base goal. If the numebrs can't produce that, move on.

Edited: 06/26/2010 at 04:59AM

Will Barnard, Barnard Enterprises, Inc.
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Lucas Cookson

· Torrance, CA

15 posts
1 award
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Apr 04 '08, 08:04 AM

My opinion is that action is better than no action. In addition to the ~$40 a month profit I make (after subtracting repairs, downtime between tennants, etc), I'm gaining equity, and it's been quite the learning experience.

In the end, 40 bucks is 40 bucks, and when I sell hopefully I'll be able to make a profit on that as well. Lots of people in California are happy just to break even on their rentals.

Edited: 06/26/2010 at 04:59AM