Southern California negative cash flow

53 Replies

@Shiyuan Zhang

You cant find a multi family in long beach or riverside for under 400k.. In Riverside a triplex will start at 600k and a quad around 750k. 

They will have deferred maintenance,  under performing market rents and we cannot move tenants due to eviction moratorium.

But in 2 to 3 years, these same properties will be stabilized and performing at market rents..and earning great yields..

Patience is the key to investing in Southern Ca

@Will Barnard

I started with a 6 unit in Riverside county in 2018.. sold that for 300k profit in 2020.. I realized the power of apartment investing.

we sold four SFRs ( bought during recession in High Desert area) and1031 exchanged into 25 units in riverside county . We will stabilize market rents in 2 years and well over six figures of rental income...

Southern Califfornia is a different ballgame altogether.

I don't think @joevilleneuve said anything wrong and don't think he meant any negative thoughts. He is just saying that you should create and build a standard for your investment career and purchases and do not rationalize or deviate from it! 

As a realtor and advisor, I would ask you a few questions to better guide your thinking: (you can ask yourself these questions) 

1. Will this be a primary home or strictly an investment? 

2. How much money/ capital do you have for this investment? 

3. Are you willing to be creative (house hack), buy a fixer, a small home to make bigger etc etc (or NOT) ? 

4. Are you looking to re-sell the home for a profit within the next 5 years or is this a long term buy and hold? 

Along with a couple more questions about your long term goals, motivation, experience, resources and personal philosophy... 

All these questions and mainly, how much money do you have or qualify for : will be crucial to your path and plan now and in the future. 

Like joe mentioned above, you will need to create a standard to the properties you will buy and create a strong 'Focus' to these. Otherwise you will be paralyzed by so many options and "opportunities" 

This is the difference between the menu at "the cheesecake factory" with 1000 options, compared to "in and out" that only has 2 or 3 options . 

Professionals often say: when it comes to RE "going general could make you a lot of money, but creating a Niche will make you a fortune!" 

You can change your mind in the future (and a lot of investors often shift and pivot later) but creating a focus now will help you get started and actually buy some deals. 

Remember that the best time to buy a real estate property, no matter what it is, was always 10 years ago! :) 

No matter what you buy: Here in your back yard or OOS will be a GREAT investment in 10, 15, 20, or 30 years. I see a lot of new buyers/ investors in their head about this. 

1. Create a plan and focus attached to a timeline

2. Give yourself a timeline for research (1 to 2 months) no more and no less... 

3. Create a standard for the homes you will look and the homes you will buy (i.e. SFH, Condos or town homes, Duplex, what size, what realistic price point based on what you can afford and qualify for, will you fix it, or add ADU or add sq footage etc )

     A. create a pros and cons list for each and choose ONE that works for you and your goals. 

4. Lean on the professionals (i.e. Realtors or other investors you can trust or word of mouth referrals) 

5. Get approved right away. 

6. If the property you are looking for is not for sale think about creating it. :) 

In most places in S. Cali : it is extremely difficult to cash flow. So you have to be creative and add value and add the potential for cash flow. 

I've help many investors out here cash flow between $500 and $1000 per home. 

Live below your means, build an emergency fund, take care of your credit, reduce or eliminate debt, Save and Invest in Real Estate! Start yesterday as long as you can afford it and are ready! 

Good luck and here to add value if you or anyone else needs it!