Impossible in Los Angeles?

[Frederick Sutton]

Hi my name is Fred and I am new to BP. This is a very cool resource. I have spent my entire life in Los Angeles and I am sick of paying rent to someone else each month. I can't say I make a lot of money but I have some money stashed away and would like to try and swing n a M/F property.

Are there any strategies that can result in positive cash flow in LA for entry level investors? I am not trying to be Donald Trump. I would like to cover my expenses and get a few extra bucks a month. Is this impossible here in LA? A duplex in a questionable neighborhood is 800K for pete sake.

Is it wise to try and buy something in Riverside or surrounding outter cities while still paying rent here in LA (Westside). Thank you for any advice or guidance.

[Amit M.]

as I told another budding LA investor asking the same thing: cash-flow pays the bills; appreciation makes you rich.

I live and invest in San Francisco. I own 2 small buildings, one converted to condos, the other in process. I live comfortably off the income (av rent over $3200/unit.) I have a ton of equity, and will be making another purchase soon by leveraging part of that equity. I hardly spend any time on prop mgmt, as my tenants are stable and all professionals. It's a cinch.

Whenever I go to local RE clubs, there is a reason why so many out of state investors looking to raise capital frequently come to pitch their projects to us CA investors; all the money is here.

My suggestion: figure out a way to buy locally. Try to by 2-4 units where you can owner occupy. You get the best rates, are close to your tenants, and can learn the ins and out of landlording. Buy in a decent, upcoming area. Even consider a larger down payment (if you can) or take a reasonable negative cashflow you can support. You'll learn a lot, and if you choose a good area, will probably reap some nice equity over the next 2-4 years, which you can later tap into to help fund another purchase.