Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
I don't have a crystal ball, but I'd expect what I've been expecting since last year and that is a bit of stagnation, especially in the outer cities. We have seen a bit of a run up in price as supply has been low, but I don't see prices dropping significantly, at least not on sub $450k-$500k properties.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Brandon Carlson most of the cities can have good choices and being flexible in location probably gives you the best chance of success. The only places I'd avoid are the places/ neighborhoods that you personally wouldn't be comfortable living in if you had to. Where I'm seeing the best bang for your buck now is probably Fontana and Murrieta at the moment, Riverside has gone up a lot recently and a lot of the prices especially in the western part just don't make a ton of sense, even when compared to the nicer, newer, and better school districts of the eastern part of the city. Jurupa can be similar but also you get some older more rural properties that are "unique" Menifee can work but except for a few neighborhoods most of it is either a 55+ community or 2010 build or newer meaning it is more expensive and has Mello Roos which usually doesn't make for the best investment.
Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes
6y
@Aaron K. Thank you for your input. Murrieta has been on my radar as well as Temecula. Great school system and both towns have a lot to offer. To your point, I may have to look for B neighborhoods based on the type of people I want to attract to my rental.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Brandon Carlson most of what I have now is Moreno Valley/ Riverside but I haven't bought anything else locally in a bit more than a year, I am keeping a pulse on the market though, Moreno Valley has just shot up in price over the past 2 years or so.
Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes
6y
@Aaron K. I am doing the same. Just waiting patiently to see what pans out in the next 6-9 months. Obviously, timing the market is difficulty and by no means I'm I stating that something is happening but I am predicting some sort of correction.
What are your thoughts of where the market is heading?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
I don't have a crystal ball, but I'd expect what I've been expecting since last year and that is a bit of stagnation, especially in the outer cities. We have seen a bit of a run up in price as supply has been low, but I don't see prices dropping significantly, at least not on sub $450k-$500k properties.
Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes
6y
@Brandon Carlson @Aaron K.
Hey guys
Do you guys currently own property in CA? Do you guys go after SFR, 2-4units or 5+? What's the reasoning behind staying in Ca? Do you guys manage your own deals? Going for appreciation? I live in Murrieta and sold the properties I had in Riverside,ca and did a 1031exchange and moved it into an 8-unit in PHX,AZ. I moved it because to me the numbers make more sense the bigger you go and it becomes a safer investment. When I moved my money I make more money and it's more diversified. I also have a property manager so I don't have to worry about too much. I also thought California May not be the best state to be a landlord in. Interested to hear your guys thoughts.
3. I use PMs (which are cheaper than any PM I've found OOS)
4. appreciation is a factor but not the primary one, given purchase price several years ago, prop 13 etc. what I already have offers a better return than I could get OOS
5. That being said except for exceptionally good deals in CA I'm mostly looking OOS
6. I like SFR because if I wanted to sell they are easier to move, and move at top dollar compared to something like an 8 plex
7. I would think a single larger complex would be less diversified than spread around SFRs
8. As for the legalities it is bad if you don't pay attention, or are the tenant that has a landlord that does pay attention. Rent control is a great example I'd often not raise rents for years at a time, now with rent control and the looming potential for it to affect SFRs as well there are no longer years where it doesn't rise to market. Also because it drives others away it raises rent prices overall, as long as you stay on top of it not a problem. Also when I go OOS I really miss prop 13, we often don't realize how nice that is to have.
Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes
6y
@Aaron K.
Thanks for your thoughts. What other states are you investing in?
What I meant in terms of diversity is if I have a SFR and someone moves out I am 100% vacant. In the 8-unit I'm 12.5% vacant. (Obviously want to go bigger)
Is your plan to hold on to your properties long term? The reason I ask if you plan on doing a1031 exchange you won't be able to go as big as you want since if you sell it as a portfolio you will usually give some type of discount. Also, say you have eight SFR, you need to coordinate eight different transactions instead of one transaction.
All that being said I think investing in real estate is always a great plan no matter the type of real estate.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
@Nick Robinson yeah I think the diversity is more or less a non-issue once you get past like 3 units because it will average out more evenly. Yes I plan to hold long term, I don't think selling as a portfolio is ever a great way to go, I'd much rather go through an ibuyer if I had to or just suck it up and do the 8 transactions, they really aren't that bad once you understand the process. Also because I'd plan to stay in SFR or similar I could probably do 1 at a time if I wanted, not to mention a $400k SoCal house goes a lot farther in other states.
2. At the moment SFR, but my goal within a year is to get a duplex and house hack.
3. California is where my family is at and my job. The appreciation that comes from California, is exciting. It has allowed me to leverage debt to pursue other properties.
4. I self manage my properties.
5. I have been thinking of exploring out of state investing. Possibly Indiana.