Hello,

First off I want to thank everyone for their awesome information and time taken to read and answer forums. In the last few weeks I have been reading non-stop and been learning a lot. I have read a few books already on investing in Real Estate. I want to start running but need some guidance of where to run.

I live in Los Angeles County (California) and would like to invest in a duplex. I don't have a ton of money so FHA Loan will probably be the way to finance. The thing is that Ontario, Inland Impire and other surrounding cities are really expensive. I have searched under realtor.com and asking prices for duplex are in the high 300's or 400's.

I need some advice if I should invest outside of California on my first investment property or should I get an investment here in California with low or no cash flow. 

Any help and advice will be appriciated. 

Only 300-400k? That's a steal for two units if they are nice. Well considering you'd have to pay me to live in many parts of the Inland Empire (particularly the areas I'd imagine you'd find such a deal), I can see how that is still too much to be worth it for a live in situation. Pomona might work, there are few duplexes for sale there on the MLS for less than 300k. It is also closer to LA than Ontario. And why invest in other states when we have all kinds of prices here in California? All you have to do is leave the LA/OC metro and prices bottom out pretty good. Especially if you look in Temecula or the elephant graveyard, er I mean Antelope Valley.

Hi Julio I'm facing the same dilemma I live in the L.A county as well, over in the San Fernando Vally. I've been looking out in Bakersfield and Lancaster area I found that prices are lower in those areas. 

@Julio Contreras I completely understand your dilemma, being that I live in LA. Since you are shooting for an FHA, that would tell you that you are only investing out of state if you are moving out of state. You won't get an FHA unless you plan on occupying one of the units as a primary residence. You would have to move in within 60 days of closing.

There are definitely duplexes in the Bakersfield area for significantly less than 300-400 k just be sure you do your research. I am in the process of learning the area. rents are less than in LA  and we have some definite war zones. But there are certainly deals to be had wherever you go if you just keep looking! 

@Scott Reiley Thank you for your insight. yes 300-400k prices most likely will come with some rehab and the area might not be too good. I will look into Pomona and the other areas you have mentioned. Since I dont have enough cash to put down 20% I will need an FHA loan that means I will have to live in the property for some time. So Pomona will probably be a better fit. I will continue to read and learn and will most likely purchase a duplex in the next year.

@Jon Huber Thank you. yeah that means that I will stay in Cali for some time which I don't mind since starting out I will do part time and work on the side.

@Rachael Collings I will have to look in BakerField. How good are the rents overther? is the Vacancy higher?

Julio,

The Bakersfield market, like any medium size city, is pretty diverse.  It possible to buy in everything from A class to D class, and each will have its own issues.  Cashflow is likely more possible than in most of California.  

If you are working in LA and want to occupy the property, Bakersfield would be a rough commute. Honestly I think at your price point, you might be better off pursuing a live in flip. You can do it with a condo or townhouse. That way you can afford to do it in the area that is right for you to live in, instead of choosing your residence for the next few years based off of local duplex prices.

Duplexes in California aren't as good of a bet for cash flow anyway. You'd have to get a crazy good deal for the rent of one unit to cover the mortgage, insurance and taxes. You could still save money on housing expenses by having that additional unit covering a chunk of your monthly payments. But then you have a tenant to worry about.

@Scott R.

 Thank you, I wil look into live in and flip. I will have to do more homework to find out where I can find some good deals near Los Angeles. I like to fix things so I am assure that fixing wont be an issue for me. Again Thank you Scott for your insight.