Hello BP community! I'm the definition of a newbie investor. I am reading a ton and soaking up as much information as possible. Not only am I looking to network and learn from the best but i'm also ready to start my investing career. I have a small amount already saved and believe house hacking is the best place to start my investing (I currently rent). House hacking is an awesome and proven strategy but the hurdle I currently face is where to find a good house to hack. I currently live in the West side of LA (Culver City) and need to stay in this general area due to work. What is the best next step for me?
Do I connect with a local realtor? Look online on my own? Drive around and look for deals?
If you guys can lend some advice that would be greatly appreciated! Thank you in advance and look forward to learning from you all!
@Steven Smith Recommend you read up here on BP on house hacking. Also, attend a local REI meeting and network with investors on "investor friendly" lenders that help investors get pre-approved before you house hunt. You need to see what you qualify for first. But if this doesn't meet your financial goals then keep saving until you are in a position to buy in next 30 days. If you are already pre-approved and it meets your financial goals when your networking at local REI meetings you can get recommendations for investor friendly Realtors too. Personally, I recommend working with one that is a fellow investor. The mentoring and network of other contacts that can help you build your business are priceless.
@Steven Smith welcome! I suggest as well that you explore your financing options and see how much you qualify for before chasing after properties. Shop around for lenders and find one you feel comfortable working with and that provides a reasonable rate. I suspect that LA is a tough place to make house hacking work due to prices and competition but I've never been there so I don't know.
One thing to consider about house hacking in an expensive market such as LA is even if you can't live for free, paying a fraction of your current rent could be worth while and catapult your savings/future investments. A suggestion I have is when analyzing deals, run the numbers 2 ways.. One way with you living there and one way when you eventually move out. That way you can check to see if its a good deal when you move out. Best of luck!
Definitely work with a realtor. For a buyer, there is no benefit of working alone. Without a buyer agent working with you you will have access to the MLS data and can they also help you out with the paperwork. Also, buyer agent in my area give credit back to the buyer. I am not sure how it in LA but I do give cash back to my buyers all the time. So to answer your question, I dont know any reason to not work with an agent as a buyer. However, you do want to let the agent know what your intentions are right off the bat. Some might not be willing to work with an investor if the investor require them to do more work than a typical buyer. Take myself for example, I am looking at properties in Riverside county to invest. Me (agent) will not drive me (investor) around to check out all the properties in Riverside that me (investor) want to check out since me (agent) know that me (investor) will put in hundreds of low ball offer (20+% below asking). However, me (agent) can help me (investor) to draft up offer and submit subject to interior inspection. Only when the offer is accepted will me (agent) show the property to me (buyer). Also, at closing me (agent) will credit some of the commission back to me (investor). Hope I didn't confuse you. The reason I use myself is to not offend any agent/investor on here.
@Steven Smith Ditto the advice on talking with an agent. Find out as much as you can about the market and different areas as well as rents. FYI, parts of Los Angeles have some rent control, while Culver City does not.