La Palma, CA · Member since 2015 · 14 posts · 0 votes
This question is to all seasoned investors. I live In Orange County, CA and have $80,000 to do my first RE investing. I am open to all types of investing. What should I do?
Welcome to BP! I am in Mission Viejo and would love to connect if you have the time.
I am primarily a buy 'n hold investor with properties in Memphis, Atlanta and Indianapolis. Although I have purchased SFRs, I am now focused 100% on multifamily.
$80,000 won't do a lot in California but could do a lot in other states, where properties are much less, CAP rates are high and Cash-on-Cash returns significantly higher. In Indianapolis and Memphis, for example, it is very easy to find duplexes for $40-50K. With $80K, instead of buying two for cash, you could easily buy 8 duplexes for 20% down. That would give you 16 units/doors and, at say, conservatively, $100 per door net, that's $1,600 cash flow per month. That's a 24% cash-on-cash return. If you paid cash for 2 duplexes and the rent was $600 per unit, using the 50% rule, you could cash flow $1200 per month and later do a cash-out re-fi to purchase more properties. You have a number of different options.
Now, there may be some BPers that invest in California that might have a different suggestion for California investment options but that is my recommendation based on my experience.
Let me know if you want to grab a coffee sometime. I'm always happy to meet and share what I know.
Investor · Cincinnati, OH · Member since 2008 · 319 posts · 243 votes
10y
@Shawn Tang Cashflow in your local market is most likely going to come from flipping. There was a BP podcast within the last few weeks about a guy that focused on flips in orange county and LA county. Though doing flips is really building a business rather than "investing" in my opinion. You are making money primarily off of how well you can do forced appreciation. One of my favorite things about the business is that its fairly easy to wrap your head around. Move in ready property is a product that the majority of Americans want for their families.
If you are investing out of state, I would encourage you to look into multi family properties. If you are managing a multi family remotely, you will have the ability to fly in and really inspect the place personally, when you make a decision to do something, it can be applied to all units rather than just a unique situation in an SFR (all sfr's are beautiful snowflakes) The disadvantage is that if things start to slip from your control it will effect the quality of the entire property, encourage the good tenants to want to move out and bad ones to move in.
Wholesaler · Pittsburgh , PA · Member since 2015 · 23 posts · 3 votes
10y
Hi.
I'm currently trying to get my first couple of deals closed, I've been marketing like crazy and have had positive responses but no one is biting! These are quality properties and are priced well, based on comps in the area. Anywho, I stand to profit $94K and want to put that into a multifamily property. I'm trying to find a property that will generate a NOI of $10-20K a month. Should I put it all in one or spread it out over smaller multi-families?