Putting together a plan - Buy & hold in Socal

Buying & Selling Real Estate
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Putting together a plan - Buy & hold in Socal

David B.
Los Angeles, CA · Member since 2014 · 17 posts · 4 votes

Hello again BP !

This is my second post now. I have to say I am really glad I found this site. Everyone is amazingly helpful and there is a wealth of knowledge to be had on here. My initial idea was out of state investing through a Turnkey company because I thought the Socal market was going to be too difficult to enter due to the high prices. After a handful of replies to my initial post and some private messages I realize it is doable. 

Does anyone have any specific areas in Socal that they have found to have good appreciation, cash flow, and a purchase price of under 150k  ? I've heard a lot of talk about the Inland Empire so I'll definitely check that out to start.  

I just listened to @Aaron Mazzrillo podcast (#37) and this guy has things figured out pretty well. He has really learned to automate his life as much as possible and generate a steady passive income. This is definitely my goal. I'd like to acquire a bunch of rentals that cash flow enough to support my lifestyle as well as create a nest egg for retirement. 

Now all I need to do is get started......

A few questions here. 

1) What is the best way for me to find deals ? Would you guys recommend using a wholesaler ? If yes, does anyone know some reputable ones they can send my way ? 

2) I guess the real kicker is capital. I know everyone on here did not start with loads of cash. How am I supposed to leap from from property to property without running out of cash QUICK  ? Say I have 60K to start out with. I buy my first property for $150k. 20% down =30k Repairs = 20k. Bam! I am out of money. Is there something I am missing ? It will take quite some time for me to replenish another 50-60k to invest.

3) Has anyone had the chance to try out Ben Leybovich's program. I'm sure it is legit but is it worth the money or can I find everything I need on my own ? 

Thanks in advance !

David 

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David Friedman
Property Manager · San Bernardino, CA · Member since 2014 · 473 posts · 238 votes
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@David B. Three words: OPM or Other People's Money. also, most people on here who have 100 units have either been doing real estate for a long time and have made successful choices throughout all of the ups and downs or have had previous successful careers. You can't compare your current status to other people's. Sometimes they are just really lucky. But you cannot rely on luck to become successful. Use that 50 K that you have in the most efficient way that you think is possible. Also, only 100 units in Georgia is going to be much easier to achieve than in California. It's all relative. Make sure you understand the context. the best thing to do when starting your first journey in real estate investing is to read a lot and learn a lot. At one point, you just have to jump in

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  • David Friedman
    Property Manager · San Bernardino, CA · Member since 2014 · 473 posts · 238 votes
    11y

    Hello @David B. I'm an agent and investor in the Inland Empire. Here is my experience after doing this for almost 3 years.

    I have not been able to find a good wholesaler in the I.E. Maybe I haven't looked hard enough or maybe it is because I mostly work with cash (I do love finding the occasional seller carry).

    As far as loans go, you could start out with an FHA loan of 3.5% down. Even conventional loans can be done with a minimum of 5%. Keep in mind though, that if you are below 20% of equity within a property, then you will have to pay mortgage insurance.

    In California, even the less desirable areas, you'll have properties that are more expensive then some of the "cashflow states" that everyone talks about on BP. California is expensive, but it is still possible to find cash flowing properties for a good deal. If you can find a cashflow property in SoCal, then you will not only have the benefit of rental income, but appreciation as well. In the scheme of things, 60k is not a lot of money for real estate, but if you know what you are doing you can spread it out and use it to its full potential.

    If you have a job besides doing real estate then you'll have to keep saving until you can purchase your next rental or bring in a partner with money, etc. There are not many scenarios that I am aware of in SoCal where you can do 0 money down.

    If you have any other questions about how I invest in the I.E. then feel free to PM me.

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  • David B.
    OP
    Los Angeles, CA · Member since 2014 · 17 posts · 4 votes
    11y

    Thanks @David Friedman . Yes, I understand 60k is a bit limited. I still don't get how some of the investors on here went from 0 to 100+ houses in a matter of a few years. No way they have 50k to throw down on each of them. For the most part seems like they did't all start out with hundreds of thousand or millions in capital. What am I missing ? 

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  • David Friedman
    Property Manager · San Bernardino, CA · Member since 2014 · 473 posts · 238 votes
    11y

    @David B. Three words: OPM or Other People's Money. also, most people on here who have 100 units have either been doing real estate for a long time and have made successful choices throughout all of the ups and downs or have had previous successful careers. You can't compare your current status to other people's. Sometimes they are just really lucky. But you cannot rely on luck to become successful. Use that 50 K that you have in the most efficient way that you think is possible. Also, only 100 units in Georgia is going to be much easier to achieve than in California. It's all relative. Make sure you understand the context. the best thing to do when starting your first journey in real estate investing is to read a lot and learn a lot. At one point, you just have to jump in

    1Reply
  • Marjorie Jean-Baptiste
    Columbus, OH · Member since 2014 · 8 posts · 3 votes
    11y

    Hi David,

    I purchased Ben's program a few weeks ago. It is my first and only program I believe I will purchase. In my opinion, it is fairly priced considering how detailed and comprehensive the contents are. 

    Could I have gathered the content elsewhere and possibly for free? Yes, I'm sure.

    Do I regret it? Absolutely not. I now have a lot of what I need all in one place. 

    Hope that helps some.

    Good luck!

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  • Mathew Gunkel
    Investor · Pennsauken, NJ · Member since 2014 · 50 posts · 10 votes
    11y

    Great questions!  I am starting out on the east coast, and have been trying to figure all of this out as well.

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  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    11y

    If you have $60K cash to start, you need to do a few flips to build your capital. As your flipping business grows, you can start setting aside the rental quality properties. Focus on building capital now. The rentals can come later.

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