First time buyer looking for duplex in California. Looking to connect.

Multi-Family and Apartment Investing
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First time buyer looking for duplex in California. Looking to connect.

Kevin Thomas
Member since 2023 · 11 posts · 10 votes

Hey BiggerPockets community!


My girlfriend and I are looking to purchase our first property together. We know that turning a profit in California is near impossible, but we want to live in California AND we want to be strategic with our first home by thinking of it as an investment strategy. 

I was told that a duplex would be the best way to go. But, I’m not sure what cities to be looking in. We qualify for up to $875,000. We are currently looking in Elk Grove but I would prefer to be in SoCal if possible. Even if that means moving to somewhere further inland like Rancho Cucamonga/Fontana/Riverside. 

But, I’m completely stuck. I don’t know how to determine which market would be the smartest move. And I’m struggling to see what options going with this strategy would provide us in the future. 

I'd love to connect with anyone who is investing in California and focusing on MFU and even SFH. At this point, I'm wondering if buying a fixer upper SFH and treating it as a "long term" flip (1-2 years, would be the best option. Open to learning.


For more context, we'd be using an FHA loan and putting down 3.5%.

Cheers,

Kevin

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  • Kyle Tusing
    Real Estate Agent · Northern Virginia · Member since 2019 · 79 posts · 33 votes
    3y

    Hey Kevin,

    I know little about the California market but I have some amazing team members out there that could send you options and help you work through them to see what you can make work. Personally, I would lean toward Multi-Family if you can, If a good SFH comes on the market with an easy way to rent out part of it or rooms I would definitely evaluate that as well. Let me know if you would like me to connect you with my team member.

    0Reply
  • Davis Carter
    New to Real Estate · Redlands, CA · Member since 2021 · 6 posts · 2 votes
    3y

    Hi Kevin, my wife and I are currently in a very similar position. We are looking to househack in Redlands, CA area with an FHA loan. It definitely is difficult to cash flow, but if you are set on staying in CA and the the alternative is paying pretty steep rent, then building equity through the house hack is definitely a great alternative! I would definitely recommend getting connected with a great agent and lender through BP as well!

    0Reply
  • Account Closed
    Columbus, OH · Member since 2023 · 427 posts · 254 votes
    3y

    If cashflow is out of the window, and you're simply looking to either spend less than your current rent or similar/more while building equity, pick an area with strong growth that you foresee appreciating in the long run. And if you're living there, obviously pick an area you'd like to live. 

    0Reply
  • Scott ScovilleBusiness Member
    Real Estate Agent · Sacramento, CA · Member since 2019 · 497 posts · 272 votes
    3y

    Hey Kevin, I'm an investor focused real estate agent and I have my own investment portfolio all in the greater Sacramento area. I'd be happy to connect and chat more. Best of luck.

    [email protected]415-933-2202
    Scoville Realty & Investments LLC
    WebsiteView Page
    0Reply
  • Ranjit Sandhu
    Real Estate Broker · Rocklin, CA · Member since 2020 · 221 posts · 82 votes
    3y

    Hi Kevin and Davis, I'm a real estate broker and from Rocklin which is 20-30 minutes from Sacramento area. We have many duplex and multifamily properties. Positive cash flow will be not possible as the interest rates are high. Let's connect and I can help you in Elk Grove, Sacramento, Antelope, Roseville, Rocklin and Lincoln areas in Northern California. I have helped many Bay Area investors in my area.

    0Reply
  • Josue Rosa
    Realtor · Los Angeles · Member since 2023 · 18 posts · 15 votes
    3y
    Have you considered less traditional options, like using the additional units/rooms as student housing if you buy near a university, or rent by the room? There are ways to significantly increase rental amounts if you're willing to learn about other options.

    Also take into account what your long term goals are. Are you focused on an appreciating market? Is immediate cashflow a must have? Will you be expanding in the same market or jumping around?

    Sorry for not answering directly, but answering these and a few more questions will make the path clearer. We have our portfolio here in Southern California, do multifamily sales, and also own a property management company. Find the right team and you can find success almost anywhere!
    0Reply
  • Brad Sneckner
    Lender · Riverside, CA · Member since 2014 · 75 posts · 60 votes
    3y

    Hey @Kevin Thomas! I have a couple of thoughts... First of all, I think a duplex purchase is a fantastic option to kill two birds with one stone, those two birds being 1) A home for you and your girlfriend to live in, and 2) A property with great long-term investment potential. 

    In regards to choosing a particular market, it really depends on the specifics of your personal situation. Where you each work/commuting needs, family/friends, length of time horizon, etc. I think the OPTIONS that this strategy would provide you in the future are that you would be able to own a property with increased cash flow in the future. The more units the better, but with current interest rates and rent levels, it's really hard to make a 3-4 unit property work on an FHA loan due to the self-sufficiency test requirement. A duplex will provide you with a home AND income, which helps you to set yourself up for the next purchase as long as you're diligent to save that extra money rather than upgrading your lifestyle.

    It's not a bad idea to explore the fixer-upper option either. I would just say it depends on how much excess cash you have/earn monthly and how handy you are with doing some of the upgrading yourself.

    In either case, I have helped many clients carry out both of these strategies in the Southern California area over the years. Happy to offer thoughts or answers on any specific questions you might have, just tag me so I get the notification. Good luck sir!


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