1st Deal in LA- Stuck and can’t decide on strategy

[Cameron Stevens]

I live in Long Beach and am looking to get my first deal (hopefully first of many many more!). I have 30k to put down, and am working to get that number up to 50-55k. I'm going after a 3.5% FHA loan.

I can’t decide on strategy between strategies. I want to make sure I a make the best move possible so that I can be set up for the next(2nd) deal! It’s causing me to feel some analysis paralysis big time. Here are the 3 strategies I’m torn between:

1. MFH (Duplex) in Long Beach and live in one unit. target price is 900k-950k. At this price, I’d need $2500 at least in rental income (which is right about market 2500-2800). This leaves me paying $3k monthly to mortgage. I wouldn’t be able to move to 2nd deal until I can refi out of fha/mortgage ins (this is the only way this property becomes pos cash flow with another renter taking over my unit)

2. SFH that needs work at 500k and use a 203k loan. This way I could force appreciation and refi out of loan faster. For exit- I could sell (live and flip) or hold and rent. The issue is I would have to find more capital for deal #2. Tough without cash flow.

3. Go long distance- the prices and the rents in la county don’t line up! Stay were I am renting a place and invest somewhere I can generate immediate cash flow. Buy at 150k-300k range and rehab, rent, refi, repeat.

Help! What would you do?! Thanks!