People are fleeing California, are you?

311 Replies

Originally posted by @Karen Margrave :

@Lee S. I'm the OP and the post has nothing to do with politics, and everything to do with my curiosity about what real estate investors are thinking when it comes to investing in CA. There's a lot of changes going on in CA, yes they're due to the politics of the state, but affect people from every walk of life, and political persuasion. For instance, once the tax on water starts it will impact people that are renting out homes to students, seniors, and others in shared living environments, as well as those that own short term rentals, etc. Mandatory solar will increase the cost of all new units being built. How will those things impact investors decisions when it comes to buying real estate in CA? As a builder I like to look at what's going on in areas and the effect it could have on the local  markets. 

Sorry you don't like the post, but I've found it very interesting and fun.

water tax appears to have been pulled, I didn't know much about it but via a quick search I found this article:  

https://www.sacbee.com/news/state/california/water...

 95 cents a month!  really?  if that is going to put an investor under I think they may need to look into another activity.

As far as solar, do you have solar?  I have solar, paid cash for an 8kw system 7 years ago and it has already paid for itself.  have you ever done the math on solar in California?  Do you realize a buyer of a home with solar literally gets paid to buy the solar home?  Shall I do the math for you?  ok...

My solar returned better than 15% per year on the money I paid for it.  How much is the typical home loan interest rate?  lets go with 5% currently, though I think it may be a lower than that.  Do you see where this is going?  If I can borrow money at 5% and make a 15% return on that money....I'm making money off the extra cost of the solar added to a new home from day 1, meaning the additional mortgage payment is less than the amount I'm saving on electricity.  mic drop.

We can all point out things politically about the "other team" that we don't like and cherry pick.  How about this, where are a majority of the broke a$$ teachers that are striking?  Red states.

StateAverage Teacher Salary RankingChange in per-pupil state spending
Arizona43-36.6%
Kentucky26-5.9%
Oklahoma49-15.6%
West Virginia483.6%

We can all go back and forth on political differences but in the end who cares, it's a real estate site.  If enough people dislike the state politics and costs and leave then things will get cheaper and less crowded.  I don't see it happening, and I couldn't care less about the people that are leaving, hasta la bye bye.

Originally posted by @DL Martin :
Originally posted by @Lee S.:

 That's ok, couldn't pay me to live in fly over country either.

   I live in the Sierra foothills less than 2 hours due east of SF and I can ride my bike the 70 miles to Yosemite Valley or the 130 to Tahoe from my front door, done both.  Unfortunately this also puts me in the land of #MAGA but I tolerate it.

Not sure why it matters on a RE forum.  Maybe I'll start a counter thread "how much would I have to pay you to live in fly over country" to prove, well, nothing.

Uh... @lee s...  I hate to break it to you, but you do live in Fly Over Country.  

Actually, you live in the very worst of flyover country because, based on the above description, you are no where near a real airport.  

But that probably won't matter when THE BULLET TRAIN is up and running. LOL.  (revised estimate to build, as of March 2018, $77.3 Billion.)

DL

#MAGA 

 Yup, that 90 minute drive every year or two when I get on a plane is a massive burden.  Nice explanation of "fly over country" though, doubt many would agree with it.  Funny seeing a #MAGA clown a train when your boy wants to build a wall....forgot, mexico is paying for it LOL.

We can all play this lame game.

I'm lucky to own a home in Southern California, which keeps my cost of living predictable (and profitable), otherwise I'd be planning my move out of state.  

I wouldn't say I'm bearish on California, but I think when fellow CA residents file their 2018 tax returns early next year they'll realize the full sting of the SALT deduction cap and that might stir some further discontentment.  

  • Do you live in California? Yes
  • Have you lived in California in the past 5 years? My entire life
  • If so, where? San Diego, my entire life
  • Will you be staying or leaving? Unfortunately, probably staying. I've been trying to get out of here for years, and can't get away.
  • Why? I'd like to leave and go to Arizona. The grass looks way greener over there (Literally). I hate the one party rule, and massive burdens and regulations. It's hard to remember all the reasons why San Diego is so great because I'm either working or out of town. I'd also like to be able to live in the markets I've chosen to invest in. I most likely will end up here my whole life, lol.
  • What is your full time income producing job? Tile contracting and construction

Do you live in California? 

Yes

Have you lived in California in the past 5 years?

Yes

If so, where?

Oceanside, Mission Valley, North Park (all around San Diego)

Will you be staying or leaving? 

Staying!

Why?

Diversity, weather, culture.

What is your full time income producing job?  

Healthcare Finance, new real estate investor

Originally posted by @Jonathan Hulen :

I live in Torrance California, a city in the Los Angeles metro area.

I plan on staying in California. If I moved somewhere else I would feel like I was settling for less. We’ve thrown around the idea of going to Texas or Arizona so we could buy a home in an A class neighborhood. But, that would feel like giving up. We don’t give up. Leaving for a less expensive city would be giving into weakness. I’ve grown accustomed to perfect weather and the endless options for recreation. I could never live somewhere that people don’t want to come on vacation. There is a price to pay, it is exorbitantly expensive. Life is too short to settle. I’ll never say I can’t afford it. Instead, how can I afford it? There’s things I don’t like. I’m a card carrying republican/libertarian so obviously the political landscape of California isn’t my cup of tea. But that’s not enough to make me live somewhere mediocre. Also, my future in-laws will be retiring to Ensenada Mexico soon and we need to be close to family when we have kids.

I am a baggage handler for a major airline at LAX. My fiancé is a flight attendant for another airline. We make a living wage and save quite a bit of our income. But, not enough to buy a home and raise a family here in LA. That’s why we are working like nobody else to buy more rentals. We’ve made amazing progress this year. $20,000 in the bank since January! If we can do it living in Los Angeles anyone can. At this rate we’ll buy 2 a year.

 This post is smoking hot Jonathan. You both have absolutely the right mindset.

• Do you live in California? 

Yes

• Have you lived in California in the past 5 years?

Yes

• If so, where?

Los Angeles

• Will you be staying or leaving? 

No plans to leave

• Why?

Quality of life. Opportunity. Culture. Food.

• What is your full time income producing job?  

REIkit.com, Realtor, Technology Advisor, Investor

I move to California 8 1/2 years ago following a life-long dream. Where else is there to go?

• Do you live in California? Yes
• Have you lived in California in the past 5 years? Yes
• If so, where? San Diego
• Will you be staying or leaving?  STAYING
• Why? My life is here.
• What is your full time income producing job?  Real Estate Agent

Live in California (SF Bay Area for the past 6 years). Would be open to living in other places at some point down the line (wife and I both love Portland and San Diego, plus Sacramento is on the up and up) but we are definitely going to be staying. So much to do here, so many places that you can travel to and different experiences you can have in a relatively short distance. My wife and I are both managers/executives at a hospitality company with locations in SF and Southern California.

RE market is what it is in SF, but we were lucky to have a great agent that helped us get in the market relatively early. Once you get in it’s exciting to be in the game and see what options you have.

Agree with other users comments that it doesn’t feel any less busy here (if anything it’s busier) and that a lot of the people that are leaving the area are either in a place to retire (or at least downshift significantly) or are just tired of spending 60%+ of their income in rents.

Overall, the market is wild but with development restrictions the way they are, especially when it comes to SFHs, I have a hard time seeing any major departure from the demand we’ve seen I’ve the past 10+ years.

After 18 years living in the Bay Area (Fremont and Menlo Park), recently (summer 2017) we decided to move. We've been playing with the idea in the last couple of years, but in July, 2017 we decided that it's time to go and in September we moved to North Carolina. For many reasons, mainly to raise our 2 small children (1 and 2years young) somewhere else.

We sold everything (including our 9 unit rental portfolio), closed our business and started completely fresh.  I used to be a successful electrical contractor in the BA for 15 years and we owned 9 units as our rental portfolio outside the BA before we moved. Used 1031 and now we're full time RE investors (rent/flip). We enjoy our new life (completely different lifestyle-in a good way) and haven't looked back. The weather is great in the BA, but the many negative outweighed the few things that we still enjoyed. Extremely crowded, super expensive and not family friendly (our opinion). 

For those who say that only low income people leave, I disagree. Low income people FORCED to leave and many high income earners also leave. Even though more high income earners move there. In my view the long term problem is that all the "service people" with their family forced to leave. I've been in the construction industry and ran a  successful business.  My experience is that  it's extremely difficult to find workers in general. That triggers higher wages, higher housing costs, higher cost of living chain reaction where everyone forces to work more and earn more to pay to the basics. I never seen that many Teslas anywhere else, but what is the point if people drive them to go to work ?

I agree that the BA is a great place to earn a lot of money, but the quality of life not too high in there. For me life is not just about earning the most amount of money possible, much more financial freedom and choices.

Just for footnotes:

1. My brother and his family (with four children) left the BA (after 18 years) in the summer of 2017 also, they're in San Diego now.

2. None of us where/are low income earners and after moving I'm closer to achieve financial freedom than ever before

Wow! Sounds like you are doing amazing things!!! I am so curious about your condo project in Chicago. What part of town was it in ? I took a trip to the mid-west in 2016 to meet with turnkey investors. The turnkey companies I met with I did not feel all that strongly about. I love Chicago but the areas I was looking at were, in my opinion not going to see profit for a VERY long time. Chicago is a very interesting city to study because there are a lot of people leaving. I know that Chicago is driven by neighborhoods and not all neighborhoods are going down hill and not all are on the rise. So I am curious about the numbers(percentages work I don't need exact numbers) and the neighborhood. I seriously love Chicago so I would love to invest in the right areas. 

I have yet to go to Austin believe it or not but everyone keeps telling me that is the California of Texas so I am very excited to go. I have a girlfriend that lives in the Bay Area that is thinking about moving to Texas and her mother is also thinking about investing. I will be going to Austin with her to explore and do some research on the numbers in that area. I live in Houston so that's where I can help the most. She is in between Austin and Houston. So if you'd like I can do some research for you as well in the Houston area. You seem like a number girl so what numbers are you aiming to hit on ROI or Cap Rates. Also what type of investments are you interested in making.

  • Do you live in California? => YES
  • Have you lived in California in the past 5 years? => YES
  • If so, where? => SF South Bay
  • Will you be staying or leaving? => Not sure yet
  • Why? => Eventually costs will outgrow my revenue and I can't buy a home here
  • What is your full time income producing job?  => Software

It's easy. Over the last 10 years my income doubled - sounds great right? But my rent tripled and now represents 60% of my income. Think older house from the 60's, never renovated, cockroaches running around. If this trend continues I'll have to leave. 

I agree this is fake news though, looking at the traffic here. If people are leaving they are being replaced by wealthier. Eventually this has to stop.

In the meantime there is money to be made if you have $2.5M to buy flip and hold for a year or so. You'll likely get +20% return. 

I’m returning to California after 10 years out -headed to the Bay Area and working for a group in the tiny homes business - key from what I can tell is people willing to have people live on their property and the local governments easing up on codes etc

Hi @Karen Margrave (Bend OR is very pretty)

There's a reason why California generates more income than the entire UK & the 5th largest economy in the world

I'm a proud SF Bay Area girl, born in SF, parents were young struggling immigrants (dad's family was interned in the horrible camps during WW2 sadly & mom became a naturalized proud citizen) but even faced with a lot of discrimination they loved America, JFK, the vision of dreams for prosperity. Both parents were/are very entrepreneurial, exhibiting a strong, self-sacrificing work ethic: owned restaurants in SF & a dental lab in SF then moved Palo Alto.  There's something about the SF Bay Area that attracts the brightest, the go-getters and the dreamers (very optimistic people; I attribute that to the great weather and diversity in outdoor activities and cultural diversity!) I know immigrants are not lazy (as Trump suggests) and it's this drive of doing better, the inner spirit/hustle that keeps a constant new crop of smart young kids, from top universities from around the world, to move here (and yes, its difficult, ageism in the Silicon Valley does exist, so developing a side-hustle, is important as we age)... that's why I enjoy listening to Bigger Pockets! This community is great because its a collaborative educated grp. 

  • Do you live in California? Yes
  • Have you lived in California in the past 5 years? No, but I moved back!
  • If so, where? Raised kids on Bainbridge Is, WA (~15 yrs), it's a ferry commute from Seattle. Lived  everywhere in SF Bay  but college in Los Angeles, and Boulder CO.
  • Will you be staying or leaving? Staying. Tech jobs are here. Husband is in cybersecurity.
  • Why? The people are ambitious, growth mindset, optimistic, and the weather is great. WA was constant gray drizzle/high latitude/dark in winter months. 
  • What is your full time income producing job? Studying real estate. Was an entrepreneur (maritime fleet monitoring/co-founder) & sales/marketing & former reg dental hygienist 
Originally posted by @Randall Krongard :

I’m returning to California after 10 years out -headed to the Bay Area and working for a group in the tiny homes business - key from what I can tell is people willing to have people live on their property and the local governments easing up on codes etc

 I hear the tiny homes business is BIG business...  (pun intended) 

We will see! This is a program for at risk kids to build and then live in them so if I can help do some good then expand beyond that scope to be profitable to FI would be a homerun! 

  • Do you live in California? No
  • Have you lived in California in the past 5 years? Yes
  • If so, where? The Bay Area
  • Will you be staying or leaving? We left.
  • Why? Taxes was high, everything was expensive, and the school system for kids in general is not great. The weather was good, but not worth it.  
  • What is your full time income producing job? Data scientist in BioPharma.

My observation is that many CA natives can't picture themselves living anywhere else other than CA. I used to live in NYC, in my view, NYC is the only international city in the US. If you love diversity, love music, love visual arts, try NYC. 

We live in Phoenix, but Laguna's been like a second home since the '70s.  Most of the property we own is in CA.  Many people move out of CA and come to AZ, but others move in.   Clearly, the upside for CA homeowners to move to states such as AZ is that their housing dollar goes further.  The downside is that unless you're living in the IE or far from the beach, you don't have an ocean nearby.  However, in many ways, the quality of life is similar.  

Staying!! California is the best!! Best weather , diversity , culture , a lot of things to do when you’re bored or have family over!

- Los Angeles / Realtor/ Futures & Commodities trader.

  • Do you live in California? No
  • Have you lived in California in the past 5 years? Yes
  • If so, where? Bay Area (San Jose)
  • Will you be staying or leaving? Left
  • Why? Expensive, Traffic, Warriors 
  • What is your full time income producing job? Applications Developer

Expensive - we have a lot more left in the pocket for the same pay.

Traffic - every time we go back for a week or so, we get the same feeling of why did we leave? Takes just one drive in rush-hour traffic to remember how lucky we are now.

We go back 4-5 times a year to visit family and manage our 2 rental properties in the Bay Area.

I'm new to LA after 16 years in NYC and I LOVE LA!

Not leaving any time soon. 

Sunshine, laid back, diverse, now with more industries/thus interesting people. And real estate is STRONG.

sjw