Hi Everyone, I'm just getting started on my RE investing journey and would love some feedback from the community. Sharing some context below followed by a question that has me stumped.

Context:

• Pre-Approved for 550k (Owner Financing)
• Work has gone full remote so location is flexible 
• I'm working towards the buy/hold strategy... goal is to move every 1-3 years and build up my portfolio
• Interviewed 3-4 agents in LA county and I currently have my eyes set on Long Beach & North OC
• The main reason I've focused on Long Beach & North OC thus far is due to familiarity. I could find good friends to move in with me in both of these areas, whereas I'm less familiar with the rest of LA as a result of working/living in SF the last 2 years.
  

I fully understand that cash flow isn't likely especially with my price range in the SoCal market. Originally the plan was to get into an SFH or duplex and househack so I can minimize mortgage payments and start building some equity.

However, with work being remote now I'm wondering what more experienced investors would advise in my particular situation. Are there better locations within LA County I should be looking at? Or should I  move to a market with lower barriers of entry and look to scale up faster ie. Dallas/Las Vegas?


Let me know what you think, appreciate it!!

@Jack Sun

Where do you WANT to live? I'd take a look at these markets that are appealing and see what your purchasing power is there and how that aligns with your goals. It's possible to be under 550k in SoCal-especially with SFH with a place like long beach BUT maybe this is your chance to go to an area or market you're excited about. Lots of markets where you could do the house hack duplex to quad thing for 550k or under. I was just looking at an awesome quad in Kansas City in a prime area (cheaper ones outside of the prime area) for 450k. You could buy that, live rent free, save your cash, explore a new part of the counrty. Doesn't need to be KC but maybe a market you're excited about with 2-4 units that will allow you to live on very reduced rent. Do it because you're excited about the area and the opportunity though.

I'm a little biased, but I would vote for Long Beach. Our city is going through some great up-scaling and revitalization that will contribute to appreciation growth. Plus, it's just awesome to live here! My business is in OC (Newport Beach). Some areas a good in that price range. Just would not recommend it as much as the LBC. If you ant to try for a little more cashflow, you might consider San Pedro. It's a working town that serves the port and surrounding business, but it is also going through it's own revitalization. There is a cute little area near the ocean that has some small homes for good opportunity.

Originally posted by @Lee Ripma :

@Jack Sun

Where do you WANT to live? I'd take a look at these markets that are appealing and see what your purchasing power is there and how that aligns with your goals. It's possible to be under 550k in SoCal-especially with SFH with a place like long beach BUT maybe this is your chance to go to an area or market you're excited about. Lots of markets where you could do the house hack duplex to quad thing for 550k or under. I was just looking at an awesome quad in Kansas City in a prime area (cheaper ones outside of the prime area) for 450k. You could buy that, live rent free, save your cash, explore a new part of the counrty. Doesn't need to be KC but maybe a market you're excited about with 2-4 units that will allow you to live on very reduced rent. Do it because you're excited about the area and the opportunity though.

Thanks for the reply Lee. That's the million-dollar question right now haha, I'm definitely open to relocating... just not sure where to.

I think it'd have to be somewhere within sensible driving distance to SoCal, going to look into Las Vegas & Pheonix a bit more. The midwest is definitely appealing bc of cashflow reasons, just worried I won't be able to find work in my current field out there (Cryptocurrency). My current day job is guaranteed stable up till Nov 2021, it's a coin toss after that :/

Originally posted by @Nicholas Smith :

I'm a little biased, but I would vote for Long Beach. Our city is going through some great up-scaling and revitalization that will contribute to appreciation growth. Plus, it's just awesome to live here! My business is in OC (Newport Beach). Some areas a good in that price range. Just would not recommend it as much as the LBC. If you ant to try for a little more cashflow, you might consider San Pedro. It's a working town that serves the port and surrounding business, but it is also going through it's own revitalization. There is a cute little area near the ocean that has some small homes for good opportunity.

LBC/San Pedro is definitely ideal if I stay in the LA area. Curious what your thoughts are on condos in LBC? I know they aren't great for cashflow and I need to do a ton of DD on HOA/management policies but buying a bit cheaper makes me feel a bit more comfortable from a reserves standpoint + not having to do major renovations on my first buy.

If you go the condo route, I would focus primarily on condos that are south of 7th st. (ocean side). With that being said, I don't like condos for a few reasons:

1) You are relying on the other owners to be responsible in up keeping their units so that it positively effects yours. Yes, this is still the case with SFR, but more accentuated in condos.

2) HOA board - I have severe disdain for HOA's. Having owned, lived and been on the HOA board for a period of my life, that is one thing I will not want to relive. Trying to heard other unit owners around to do what is in their best interest is mind numbing. Also, if you get a poorly managed board it can be nothing but headaches.

Though, plenty of people I know do well in the condo space. I just personally don't like them. Also, take my input with a grain of salt as I'm a very independent and opinionated person. Don't do well with people telling me what to do (board members) or with telling people what to do and not having them meet the task. 

There is some great smaller condo complexes that might fit your needs well. These will always rent out. I would just try and talk to some of the residence to get a feel of the HOA and Management.

@Jack Sun do you have quantified goals and objectives in terms of your total ROI? How much negative cash flow are you willing to accept in return for what level of appreciation? Since you have the option to live wherever you want, why not choose a market that will cash flow well and appreciate? Both Indianapolis and Kansas City are good cash flow markets and currently appreciating as much as some parts of CA. Personally, I wouldn't recommend Dallas or Las Vegas. Although Dallas has some decent appreciation, it doesn't cash flow that well due to high property taxes and insurance rates. I;m concerned that Las Vegas is too unstable right now due to COVID 19. Las Vegas is heavily dependent on tourism and hospitality which has been hit extremely hard due to the pandemic which concerns me.