New to Real Estate · Long Beach, CA · Member since 2020 · 35 posts · 14 votes
Hello BiggerPockets,
I am a new investor currently looking to buy my first home to use as a house hack rental property.
Many of the properties that come up near the area I want to invest are in Compton, California. You may have heard of this city from the popular movie "Straight Outta Compton" or because of the rap group NWA. You have also probably heard nothing but bad things about this city ranging from constant property damage to gang violence.
I don't believe this city to be this bad and think there are areas worth investing in, as in any other city. I believe it has been heavily stigmatized by pop culture and major events that happened 20 to 30 years ago. I have found homes that meet all of my investment criteria other than the fact that they are located in Compton.
My question is if there are any investors who own properties in Compton? If so, what has your experience been like with the area and the caliber of tenants? If you own properties in cities other than Compton that are seen as "bad" I would love to hear about that experience as well.
Come on man! I own homes in and around 8 Mile. You probably heard of the movie “8 Mile” or the popular rapper Eminem. And I think we in the D are rated worse then Compton. I would rather be over there with the Lowriders and palm trees. Today is 7 degrees over here;).
I would suggest teaming up with investors that have properties there. Your prices are way more then here in Detroit and I can not imagine how you would cash flow. In Detroit prices are a lot different but you also have a lot of turn around, but with such a low purchase price investors here can eat 2/3 months of the houses being vacant. With your price points will you be able to foot over the PITI it vacant? I would imagine a place like Compton would have high turnover.
Btw, this is the first time hearing an investor in Compton your competition might be low which might mean 2 things either the market is not good to invest or most of the investors are considering it risky. Which leaves you with room to play, I would say if you live there and know the place it wouldn’t hurt to reach out to others if there is and see there experiences.
Lender · Torrance, CA · Member since 2017 · 14 posts · 9 votes
5y
@Bryan Igboke
Great post. I've owned two houses in Compton and sold them both, and now I'm trying to buy another in Compton via house hack like you so Compton is fine. No different than Long Beach. Compton section 8 is always a good option as of course you'll be guaranteed to get your money, but even if you don't use section 8 you'll get decent tenants. Best of luck bro. Feel free to connect with me any time. All I do is talk about real estate so no way you'll bother me.
Hahaha I knew the jokes were going to come in so I figured I'd try to get ahead of them.
That's really good to hear! I'm seriously considering investing there so the reassurance from seasoned investors in tough areas really helps.
I completely agree with you on the Compton home prices being high, but the crazy thing is that they have some of the lowest (if not the lowest) home prices in southern California where I live. I've found that renting by the room gives them the ability to cashflow if you buy right.
I'll definitely stay focused and your response has pushed me one step closer to being confident investing here. Thank you for the response!
Hahaha I just wanted to make sure! I've read so many horror stories about renting in historically "bad" neighborhoods and the books I've read are pretty cautious about them too. I figure this is the same risk that you would have in a "good" neighborhood though if you screen tenants incorrectly.
Easily one of my favorite movies so I've definitely heard of 8 mile and Eminem. I would agree that you are arguably in a tougher area than me lol.
Yeah prices are pretty ridiculous out here and this is one of the cheapest areas. To cashflow most investors turn to renting by the room and that's what I'll do too since individual room rents are pretty high as well. I work a full-time W2 job as well so I can cover PITI worst case scenario.
Believe it or not the market in Compton is pretty hot right now. I can barely even get done analyzing a property and emailing my agent before multiple offers over asking price are already made. Probably because of the low interest rates, but people around here seem to believe in the area. I'll definitely try to reach out to some investors in the area and see what they say. Thank you!
Perfect, that's great to hear. Driving around Compton I felt that it was similar to parts of Long Beach as well, but I'm not to familiar with the area so I was still hesitant.
I'll definitely look into Section 8 housing because that's an option I had forgot to consider altogether.
Compton isn't that bad, people used to turn their noses up at Inglewood and Baldwin Hills but from what I've heard it's being gentrified now . So you never know. There are still hardworking families who have no problem buying or renting in Compton.
Some investors love to bash renting to low income families but what they fail or don't care to realize is they are stereotyping a group of people because of their own ignorance. Some people do pay their rent on time, clean their house, and leave the premises dam near the same way they entered.
As if, I don't hear story after story from these same investors about how a "middle class" tenant they didn't vet properly wrecked their rentals in these non stigmatized neighborhoods.
Run the numbers, do your due diligence, trust you instincts, and don't be a sheep.
Investor · Compton, CA · Member since 2014 · 16 posts · 1 vote
5y
@Bryan Igboke
I have invested in Compton multifamily buy & hold about 10 years. Property value has almost tripled. Compton has gone from being the #1 murder capital to #14 in the US.
That said all places have good and bad areas. You should know the area well before investing. Also, you should have enough financial wiggle room to be able to screen tenants thoroughly. It's always better to have missed a few months rent, then having to deal with a tenant from hell.
Timing wise, I've been looking in LA County for a another multifamily, and it seems like nothing makes financial sense. Good luck!
That's the same feeling I got about the situation, so I completely agree.
People can have bad tenants wherever they rent out, but if it happens they don't blame it on the city as they would do in Compton and other lower income neighborhoods.
Those are some impressive / encouraging statistics!
I'm beginning to better familiarize myself with the area now that I'm strongly leaning towards buying there. I think I 'll definitely take your advice and save up a little extra money just in case the right tenant takes longer to find than I would expect.
Always good to hear from a seasoned investor who has done what I am also looking to do in the same location
I live in compton and purchased my home here. yes it does have bad reputation but it all depends on the people you are renting too. every city has it areas of bad tenents even middle class people are dirty don't pay on time and try to get away with things honestly if i could purchase an investment property in compton I would