Looking to Invest in North Orange County, CA

[Katie Tran]

Hi, 

We're a couple in north Orange County and would like to invest in a rental property closed to our primary residence. We've been reading a few Real Estate Investing books and hoping to get some advises/guidance here.

About us:

- In our early 40's, primary residence is a SFH we purchased for 750K with 20% down, now value at 1.25 million, with mortgage balance of 425K (refinance to 15 years fixed 1.99% in September 2021). Monthly payment $4,000 (including property tax and insurance).

- Our W2 income is about 480K, both working full time M-F.

- Hubby owns a consulting business, income 65K-100k.

- We have about 1 million in our 401K, 403b, and other retirement accounts (95% Vanguard index funds). And 800K home equity as above.

- I also have a pension plan through my work. 

- We maximize our 401K, 403b, HSA, Roth IRA, and 457 accounts.

- We have 230K in high yield saving account, and we're saving around additional 8K/month from our net income. 

- We have 2 children (ages 9 and 11). We do not have any other debts (2 cars 2012 and 2020 with no payments).

- Our credit scores are both >800.

My hubby and I have many family members and friends in other states who invest in rental properties.  We have been playing it safe but really would like to start investing in Rental properties as another source of passive income and to start building for our children.  Given our circumstances, would you recommend investing in another single home or a multi-unit (like a triplex or fourplex)? We're hoping to only use our 230K saving and not borrow from 401K or home equity for a down payment?

Also appreciate any investor broker or lender tips! Thank you.