Hi! I'm super new to real estate and doing lots of research, and want to get started on investing in 2021 hopefully. I live in LA, and don't have anywhere near the amount needed to buy property here. I work remotely, so I'm looking to move somewhere else, preferably in Ca though. I'm also open to possibly Oregon or Arizona that are good places to start researching for towns that are growing.  looking for recommendations or thoughts, any advice is appreciated. :)  

Hi @Leilani Leszkay . Congrats on being enthusiastic about investing and wanting to get started. Arizona is attracting a lot of Californians who are looking to move here and/or invest.

Besides being a strong market with a diversified economy, Metro Phoenix is a fun place to live with lots of outdoor activities and opportunities to enjoy the sun. With your investment budget of $20,000, you might want to get started doing a househack.

Moving here and buying a place, where you can rent out one or two rooms, would help you build equity and potentially cover your complete mortgage payment. Having lived here since 1981, I know a lot of great areas and pocket neighborhoods that offer value for your investment. 

Melanie

@Leilani Leszkay

There is a lot of opportunity in Oregon

Which is best depends much on your desired strategy and risk aversion...

@Justin Lester and I think that can be said for so many markets honestly!  It all comes down to networking until you  have a sufficient comfort level and then deploying your selected strategY!  Best of luck to you in your search @Leilani Leszkay !

@Melanie Johnston thanks so much! I’ve visited Phoenix and this is definitely an interesting idea! I’m thinking house hacking is where I’ll start. Thanks again! 

@Justin Lester thanks! I love Oregon, my sister lives in Ashland, & was looking around there, but I’m open. I’m thinking house hacking makes sense for my start, or renting via Airbnb. I’m probably about in the muddle for risk aversion

My recommendation is to read up on FHA loans so you can put 3.5% down. Then house hack all the other rooms out to cover your mortgage. With that low down you can get a nice house in AZ and find one with the most rooms you can fit (target $50k/room). You might need to convert a loft or den in the floor plan to get those rooms but it can help you cashflow!

You can buy in Los Angeles with $20K all-in.  It would be a condo which may not be a bad investment as single family homes continue to get pricier, tenants have to go somewhere.  My first house hack was a condo.   

@Rick Albert wow really? I thought this was totally out of reach for me with my amount! I'm definitely open to a condo situation. thanks so much :) 

@Collin Chan I definitely will do some research on FHA loans. I've done a little, but thank you for the reminder! this is very helpful info! can I ask what you mean by "target $50k/room"? is this the goal you'd want to meet for renting out the other rooms in the house per year?

Originally posted by @Leilani Leszkay :

@Collin Chan I definitely will do some research on FHA loans. I've done a little, but thank you for the reminder! this is very helpful info! can I ask what you mean by "target $50k/room"? is this the goal you'd want to meet for renting out the other rooms in the house per year?

Yup, so for a 5bedroom house, target 250k.  This might be a stretch now with prices going up in 2020 but I've seen some new construction still at 370k as I started looking last night after reading your post.  I just ran the quick Redfin calculator with 3.5% down.

Mortgage $1612/mo

Property Tax $400/mo (maybe find another area since i've see property tax usually around $200/mo so might be some melaroos type taxes in certain neighborhoods)

PMI $224/mo

Homeowners insurance $99/mo

Total ~$2335/mo

With 5 bedrooms, try to rent out the Master ($600/mo) and 3 other rooms ($400/mo/each) and you can cover most of your basic expenses while you live in the 5th room.  New construction can help minimize initial maintenance and replacement costs.  It doesn't work out to free but your own portion of rent will be really low but you get the advantages of principle pay down, appreciation, tax writes offs (depreciation), etc.

Keep looking as there are deals that can  net you 0 rent for yourself in the greater Phoenix surrounding area.  Try to find value add also like lofts, dens, or third car garage you can convert later to add bedroom.  A loft or Den conversion will only cost you 5-10k in AZ but can increase your cashflow another $400/mo as well as forcing appreciation through adding the bedroom.

PM me if you want to chat more.

Collin