New in real estatement in California and where do I start?

4 Replies

Hi there, my husband and I are starting out with real estate investment. We live in Northern California and are overwhelmed with where to begin

Ideally we want to invest for cash flow and appreciation but with the crazy housing price here our option is limited. I am not yet comfortable investing out of state. We are open to try out Sacramento which is about 150 miles away or Southern California since we are familiar with the area.

Any advice? I am open to connect with realtors on this forum if there’s any specializing in the second or third properties for the buyers

Thanks a bunch

@Martina Su - Feel free to reach out.  The world of real estate investing seems intimidating at first.  We try to simplify it and make it work for you.  We're in Northern CA as well and if you are looking in the Sacramento area, @Kyle Renke is a rockstar up there!

Welcome. You mentioned Southern California . Feel free to pm me and I can give some realtors that can assist . Sacramento I feel is still a great value add however keep in mind rent control in that equation .

If you were going to go non-local, I question why So Cal? So Cal has historically appreciated well but recently had a 6 year very good appreciation cycle that seems to have slowed starting about 1.5 years ago. In addition, the initial cash flow outlook is terrible. The investments (not including value adds) mostly work due to appreciation (market and rent appreciation). Seeing that we are currently in a flat appreciation phase, a purchase in Coastal So Cal could be cash flow negative for quite a few years.

If I were investing non-local, I would not choose So Cal but I also would not choose the historically zero appreciation areas (much of the Midwest). I would look for an area that appears to have further near term appreciation that ideally is not cash flow negative at purchase.

Good luck

@Martina Su , first off welcome to BP! This site will change your life if you hang out here enough. It has played a large part in my RE journey thus far. I receommend listing to all the podcasts starting at #1. Reading the book on rental property investing and the book on Long distance real estate investing. I live in Turlock which is central CA. Where in CA are you located? Finding cash flow in CA is going to be pretty difficult with MLS properties. I currently invest in Fresno because where i live you will only cash flow with 40% or more down payment. Even fresno is hard to cash flow with MLS deals. If you want to cash flow then i recommend looking for off market deals where properties need work and use the BRRRR method. However if you just want to put a large down payment down then you can cash flow pretty much anywhere in the valley. Sacramento is pretty hot at the moment but it all depends on your risk tolerance.