Southern California Real Estate for a Newbie

[Brandt Moore]

I'm about a month out from finishing my first flip in southwest Iowa, and it looks like it should provide a decent return. I also have a good engineering job in Omaha, but in August I'm moving to Carlsbad, CA because....why not. I would like to use the capital I've built up from the flip and my 9-5 to keep investing in the SoCal area. I'm mainly interested in residential, but I'm also very open to anything. I thought about house hacking or doing a live-in-flip. I'm just not entirely sure how to enter that expensive market with relatively low capital for the area, less than 50k. I also plan on getting another 9-5 in California, so I should be able to shoulder a decent amount of risk. I'm just looking for any advice, tips, or cautionary tales. It seems like the current economy could be opportunistic for somebody like me, but I'm not 100% sure. 

FYI: I'm a 23 year old newbie with a little experience but not much, and I'm motivated to try whatever to see what I'm interested in. 

Thanks in advance. 

[Twana Rasoul]

Hi @Brandt Moore 50k is plenty to get started in Real Estate in San Diego.  I'm a 2-4 unit enthusiast and mostly work with individuals that are either house hacking 2-4 units or purchasing 2-4 units as a non-owner occupied investment.  

I would highly recommend house hacking a 2 unit property using 3.5% down using fha loan or even better the VA loan (military vets) with 0% down if you qualify for that. The other option you have is to purchase a single family home with an ADU and live in the ADU and rent out the main house or vise versa.

on 2-unit properties, lenders use the rent from 2nd unit to help you qualify for an even high loan than you would just using your w-2 income. They cannot do this on SFR with ADU however.

3-4 unit properties have an extremely tough time passing the self sufficiency test fha loans have to qualify so I wouldn't waste time on 3 or 4 unit using fha.