Are you making money investing in California?

Are you making money investing in California?

Torrance, CA · Member since 2014 · 40 posts · 8 votes
Hey BP, Just curious if there are any investors who could give some advice or share their personal stories about how they’ve invested successfully in California. Some quick info about me: I’m 24, college student, two part time jobs, and am studying real estate/RE finance so I️ can buy assets ASAP. I’m based in Torrance CA which is an expensive place to live. I’ve looked at multiple multi family buildings for sale in Torrance, Redondo Beach, Hermosa Beach, El Segundo, and Long Beach, and when I️ run the numbers I see that I️ have a NOL. Most of the time the income generated by the building won’t even cover debt service. I want to avoid investing in “hood” areas where it is les expensive like Inglewood due to stories my uncle (a landlord in Long Beach) told me when he bought 62 units in Long Beach about 20 years ago. Am I️ looking in the wrong places? Should I wait out this sellers market and buy during the next down cycle? What would you do in my shoes? Thanks for reading and thanks in advance for any responses.
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Real Estate Professional · Fontana, CA · Member since 2016 · 23 posts · 3 votes
8y
Let’s connect I would love to chat with you about investing in California and how it has gone for me the last 8 years.
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  • Real Estate Professional · Fontana, CA · Member since 2016 · 23 posts · 3 votes
    8y
    Let’s connect I would love to chat with you about investing in California and how it has gone for me the last 8 years.
  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    8y
    Originally posted by @Account Closed:

    Hey BP,

    Just curious if there are any investors who could give some advice or share their personal stories about how they’ve invested successfully in California.

    Some quick info about me: I’m 24, college student, two part time jobs, and am studying real estate/RE finance so I️ can buy assets ASAP.

    I’m based in Torrance CA which is an expensive place to live. I’ve looked at multiple multi family buildings for sale in Torrance, Redondo Beach, Hermosa Beach, El Segundo, and Long Beach, and when I️ run the numbers I see that I️ have a NOL. Most of the time the income generated by the building won’t even cover debt service. I want to avoid investing in “hood” areas where it is les expensive like Inglewood due to stories my uncle (a landlord in Long Beach) told me when he bought 62 units in Long Beach about 20 years ago.

    Am I️ looking in the wrong places? Should I wait out this sellers market and buy during the next down cycle? What would you do in my shoes? Thanks for reading and thanks in advance for any responses.

     Many folks who live in CA invest out of state. The entire turnkey business model works so well because there are so many people living in CA who want to make money in rental real estate but cannot get CA investments to pencil out.

  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    8y
    James Wise I agree. The truth is that there are huge amounts of money to be made in California real estate however the barriers to entry are big. Obviously the biggest barrier is cost. If you have an income of $75,000/yr will you even be approved for a home loan for a $600,000 property? Probably not. House hacking will be hard due to the shortage of available 2-4 unit properties and their extremely high cost. The down payment, even at 3.5%, could take years to save. The low rent to price ratios will guarantee that you will probably not cash flow. If you are already wealthy or very highly paid, you can make a lot of money on California real estate. For everyone else it may benefit to look outside the state.
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