Where to invest in California?

Where to invest in California?

West Hills, CA · Member since 2016 · 3 posts · 0 votes
I have 100k to invest. I am in Los Angeles. What area would get me best investment for my money? Thanks. This would be my first investment.
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Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
10y

If you are looking for cash flow, head up the 14 to the Antelope Valley (Lancaster and Palmdale). You could try Bakersfield too, but that is a bit further away. Just know that you will likely be giving up a lot of that wonderful S. Cal appreciation to invest in these markets for cash flow. There is a lot of vacant land up there, so if prices climb, they just build more ...

Alternatively, if you do not already own your primary residence, I would look to acquire that in a nicer neighborhood which will be more of an appreciation play. Or if you do own your primary, you could consider turning it into a rental and purchasing your next primary.

I've done both short term cash flow investments in the Antelope Valley and long term appreciation plays in LA (which all started out as my primary) as described above, and have made money on both, but I have made orders of magnitude more money on my appreciation plays. The appreciation plays do take time, though ... I wouldn't count on amazing appreciation over 5 years unless you timed your purchase very well, and I doubt that is today. Wherever you buy, NEVER pay retail, EVER.

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  • Investor · Orange County, CA · Member since 2014 · 137 posts · 96 votes
    10y

    You need to first decide what kind of returns you are targeting.. How much do you need to make it worth your while?  Then decide how passive vs active do you want to be.  Generally, the more passive options like lending will have moderate returns but very few headaches.  Standard rentals will be slightly less passive, but can return more than lending if bought prudently.  Short term vacation rentals are the least passive, but have potentially very high returns.  Flipping/wholesaling also have high returns but are not considered passive at all.

    I own a couple of properties in 29 Palms that were purchased a couple years back and the returns have been good, but they have had some headaches with turnover and prolonged vacancy.  It's definitely not as passive as the rental I have in Orange County which basically manages itself and rarely, if ever, needs attention.  Lower income tenants are just going to have more issues.

    The problem with buying 29 Palms today, along with almost any 2nd-tier area in CA, is that declining interest rates have driven prices up to the point that returns just aren't enticing. I haven't been able to find any deals on rentals that meet my minimum threshold of 17% CoC. Everything is either priced too high or the few properties that are priced to sell have a ton of deferred maintenance & capex needs.

    Unfortunately, we are at the point in the RE cycle where acquiring properties is difficult and most investors that have been doing this awhile are positioning themselves for an eventual slowdown - either by paying off debt or deciding when to liquidate their holdings.  The newbies jumping in at this moment in time are going to have a hard time finding good deals and may take a bath during the next phase of the cycle if they compromised on the returns they were willing to accept.

  • Virtual Assistant · Port Angeles, WA · Member since 2018 · 24 posts · 11 votes
    7y

    @Max Gradowitz How do you feel about Fresno now? 

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