New Member from Orange County, CA (Lake Forest area)

New Member Introductions
11yFollow

New Member from Orange County, CA (Lake Forest area)

Ruben Parra
Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes

Hi everyone!

What a great community we have at Bigger Pockets! I'm already halfway through the podcasts since joining only a couple of weeks ago. I look forward to participating, learning, and hopefully partnering up with some of my fellow BP members.

Now a little bit about myself.

My name is Ruben Parra, and I work as a Program Manager in the Power Electronics Automated Test field. I've been living in Lake Forest for 7 years now, enough time to see the OC housing bubble burst and blow back up again.

Being still single, I haven't found the need to take out a long term loan for a primary residence in this overvalued market just yet. Unfortunately, I was a too inexperienced to jump into the 2010-11 bottom. I'm quite the contrarian, so I'm patiently waiting for the next housing correction in SoCal, where I could pick up my own home at a discount price. In the mean time, it makes more sense for me to invest as much as I can while still renting. Are there any others out there in the same boat, being successful at REI without owning a primary residence? Maybe you can share your experiences with me.

My goal is to generate (and increase) passive income through cash flow, while keeping my full-time job. I intend to purchase my first rental property within the next 3-6 months. Hopefully, in a couple of years I can post my own success story of gaining financial independence, like many have here in BP.

I look forward to building long lasting relationships through BP in the very near future!

2Reply
23 views

Most Popular Reply

Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
11y

@Ruben Parra 

Hi and welcome to BP! I am an investor who does own his home as well.  In fact much of the investment dollars I've used came out of owning a home in northern california that appreciated greatly in the 5 years we owned it, 2001-2006.  However I know there are many in California who don't own, and choose to invest their $$ in rentals out of state.

1Reply
See this reply in the discussion

31 Replies

Jump to latestLatest
  • Bill Larsen
    Investor, Real Estate Agent · San Juan Capistrano, CA · Member since 2013 · 150 posts · 65 votes
    11y

    Hey Ruben welcome!  I'm kinda in the same boat as you, wasn't ready to buy back when the market was down, now I can't justify buying at the current prices.  I've been investing in fix and flips in the mean time, trying to build up the cash needed to start a family in south OC.  

    0Reply
  • Larry Fried
    Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
    11y

    @Ruben Parra 

    Hi and welcome to BP! I am an investor who does own his home as well.  In fact much of the investment dollars I've used came out of owning a home in northern california that appreciated greatly in the 5 years we owned it, 2001-2006.  However I know there are many in California who don't own, and choose to invest their $$ in rentals out of state.

    1Reply
  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    11y

    @Ruben Parra Welcome to BP. There is a monthly BP meet up in Lake Forest tomorrow and every month if you are interested. PM me for details. If you would like to get together for a cup of coffee and discuss investing let me know. 

    [email protected]949-625-4533
    0Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    11y

    Yes we were sort of like you.  We owned investment real estate but did not own our house (actually we lived on a boat).  But when it came time to come ashore the first thing we did was to buy a primary residence with the express thought to live in it while rehabbing and then after a bit move and turn it into a rental or sell and take the sec 121 primary residence exemption. 

     iA thought to peak your contrarian tendencies.  Run a comparative analysis between purchasing an investment property in an "overvalued" market and purchasing a primary residence and paying your self market rent.  It may surprise you what you find.

    1. Owner occupied financing is cheaper and more advantageous.

    2. Given your passive nature the tax advantages will be very similar.

    3. You may find a much broader pool of available and priced right properties.

    4. By paying  yourself rent (saving excess) you will still be building a nest egg but it will be tax free.

    5. Purchasing a primary residence still affords you the opportunity to explore non-traditional methods of producing revenue eg house hacking etc

    6. Being single your first $250K of profit will be tax free.  And if you get married in the next two years you get an additional $250K of gain tax free.

    Just cause you live in something doesn't mean it's not an investment.

    Just some food for thought.

    The 1031 Investor5137 Reviews
    WebsiteView Page
    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @Bill Larsen

    Thanks for the warm welcome. Wow, it looks like you have been very active with many deals in the last couple of years. Good job! Is this something you do full time? I'm looking to snowball my investment and generate enough cash flow from passive income to cover my basic living expenses, and use my active income to save for a down payment (when the time is right) and travel.

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @Larry Fried

    Thanks! Investing out of state is one of the strategies I'm looking into. Even if I were to invest in my back yard I intend to keep a more passive role (i.e. I would not manage properties myself and instead hire a PM) so I would run the same risk in-state vs out-of-state. I know there is a heated debate between the two strategies here in the BP forums. I'll probably dedicate my next post to this and get feedback from investors who have tried both.

    0Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    @Ruben Parra 

    Welcome Ruben, I know that it seems to be tougher now to find a deal especially in Orange County, but as @Joe Homs can echo you just have to be willing to put in the effort. You should like you are willing and able to put that effort in and grab a great deal! I wish you the best and like Joe said, stop by the meetings. I try to get to the meetings depending on my work schedule. 

    Let me know if you need anything since we are so close.

    Regards,

    Peter 

    The McKernan Group4.957 Reviews
    WebsiteView Page
    0Reply
  • Larry Fried
    Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
    11y
    Originally posted by @Ruben Parra:

    @Larry Fried

    Thanks! Investing out of state is one of the strategies I'm looking into. Even if I were to invest in my back yard I intend to keep a more passive role (i.e. I would not manage properties myself and instead hire a PM) so I would run the same risk in-state vs out-of-state. I know there is a heated debate between the two strategies here in the BP forums. I'll probably dedicate my next post to this and get feedback from investors who have tried both.

     Are there any areas out of state that you are looking at in particular?

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @Joe Homs

    Thanks! I saw a post on the meetup earlier today and contacted Clint to get more details. I'll definitely stop by tomorrow. Look forward to meeting you there and learning from everyone.

    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    Hey Ruben! I'm just north of you up in LA/Venice. I used to own my own house but I can pretty much tell you I don't plan to do it again unless I have so much spare cash to throw at one that I do it that way. When I bought my first house (back in Atlanta), I had no idea about anything REI and I was convinced buying my own house was of course the best investment I could make...only to learn now that I'm knee-deep in REI that it's far from that great of an investment. In some markets, maybe, or if someone is house-hacking one, maybe, but otherwise....nope. I had people tell me that in the beginning but I didn't believe them. Do now!

    I own plenty of rental properties (all out-of-state so I could get cash flow on them) and I rent my place here in Venice. And I wouldn't trade it for the world! I love not having to deal with maintenance on my place or doing any work on it.

    0Reply
  • David T.
    Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
    11y

    Welcome Ruben and best of luck with your deals. BP is the best resource for where you want to go!

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @Dave Foster

    Thanks! I love when people challenge conventional ideas. The advice you give is definitely food for thought. I think creative thinking is definitely one of the major assets of a REI. It may take getting my feet wet a little before I start getting more creative myself.

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y
    Originally posted by @Larry Fried:
    Originally posted by @Ruben Parra:

    @Larry Fried

    Thanks! Investing out of state is one of the strategies I'm looking into. Even if I were to invest in my back yard I intend to keep a more passive role (i.e. I would not manage properties myself and instead hire a PM) so I would run the same risk in-state vs out-of-state. I know there is a heated debate between the two strategies here in the BP forums. I'll probably dedicate my next post to this and get feedback from investors who have tried both.

     Are there any areas out of state that you are looking at in particular?

    I'm currently researching a couple of markets. I travel on business to the Salt Lake City area at least once every three months, so Northern Utah sounds particularly interesting to me. I'm not sure if I'm too late for the good deals, but growth seems steady and decent ROI is available. I just need to weed out the bad areas from the good ones.

    0Reply
  • Quintin Mortensen
    Residential Real Estate Agent · Salt Lake City, UT · Member since 2014 · 71 posts · 19 votes
    11y

    Hey Ruben,

    Im an agent in the Salt Lake City area. If by north utah you mean Ogden, I would stay away. There are lots of good deals in Salt lake / West Valley area and anything multi family will more than likely do very well. If you are interested in investing in Ogden I would recommend getting as close to Weber State University as possible. 

    Good Luck!

    1Reply
  • Antonio Coleman
    Specialist · Sibley, LA · Member since 2014 · 1k+ posts · 190 votes
    11y

    Hi @Ruben Parra Thanks for joining BiggerPockets

    Hope you'er ready for a great ride to the top by using all the free tools and more. There free ebooks, guides, blogs and Podcasts and more to help you get started. Take your time and go through the entire website which will have something for everybody.  

    The Ultimate Guide to Real Estate Marketing: 10 Tools to Generate Unlimited Leads

    Here is another good place to start by reading some top blog posts here on BP

    http://www.biggerpockets.com/renewsblog/author/antoniocoleman/

    0Reply
  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    11y

    Hey @Ruben Parra welcome to the site! Definitely start jumping into the community here! Be sure to read through The Ultimate Beginner's Guide to Real Estate Investing to help you get started.

    Also - here's a couple articles you might enjoy:

    The 21 Best Real Estate Investing Books Ever

    How to Rent Your House: The Definitive Step by Step Guide

    How to Be a Landlord: Ten Tips for Success

    Finally -be sure to setup some keyword alerts - especially for "Lake Forest" so you can jump into local conversations.

    See you around the forums!

    Podcast Guest on Show #92
    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @Peter Mckernan I will be at the meet up tomorrow. Hope to see you there.

    @Ali Boone Great to hear someone in the same situation as I am, while becoming a successful investor. What is your favorite out of state market as of late?

    @David T. Thanks for welcoming me to the site.

    @Quintin Mortensen Yes, I was thinking precisely of multifamily in the south Ogden area, close to Weber State and Hill AFB, since I know the area.  Roy, Layton, Clearfield, are also close by. I hear south of SLC, towards Provo is a good area too, with some recent pickup in the economy. 

    @Antonio Coleman Thanks! I'm gobbling up as much information on BP as I can.

    @Brandon Turner Thanks for the welcome. I really enjoy the podcasts and think you and Josh have done an amazing job with BP. Keep up the good work! I look forward to more great advice.

    1Reply
  • William Hochstedler
    Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
    11y

    Welcome @Ruben Parra 

    Does that mean you make robots?

    If you search for "turnkey" here, I promise you will be overwhelmed, but it may give you a primer on out-of-state investing.

    Cheers,

    Wm

    0Reply
  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    11y

    Hey @Ruben Parra welcome to BiggerPockets! This is certainly a great community and it is also a perfect place to learn more about REI. Feel free to jump in and never hesitate to ask your questions. See you around!

    BiggerPockets
    0Reply
  • Andy Mirza
    Lender · Ladera Ranch, CA · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    @Ruben Parra Welcome to BP, neighbor! I just moved to south County a year ago from Huntington Beach and I'm loving it down here!

    It's interesting to read the posts on owning your own home vs. renting. I've been saying for a while that I'm a believer in looking at your primary residence differently than your investment properties. Everybody has to live somewhere and your choice ultimately comes down to your goals and your lifestyle choices. I understand why those who rent choose to do so.

    I'm in the camp that favors owning your own home. I'm married with three young children. We picked a great neighborhood that we love, that will be a great place for the kids to grow up, and we didn't buy the most expensive place that we could afford. All of our costs are only a little bit more than rent would be in the same area. Knowing that there's no landlord out there that can kick us out, is a very, very big deal to us. Like I said, this is a lifestyle choice first for us and the wealth building part is secondary.

    Even though prices seem high, consider that interest rates are about as low as we're probably ever going to see. You can get a fixed housing payment for 30 years at 4% or less. Unless you have the best hook up in the world, there's no way you can rent a place without seeing your costs go up significantly over time.

    If you're young and single and willing to sacrifice, look into "house hacking." Buy a SFR or condo and get roommates. Or buy a 2-4 plex, live in one unit, and rent out the others.

    Good luck!

    (I want to check out that meeting in Lake Forest one of these days. I keep seeing posts here on BP about it but I haven't been able to make it lately.)

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    Birmingham and Philly are my two favorites right now, just for quality of market and properties and ease of working with sellers. Well, and the returns are super high :) Forgot that last part... arguably the most important part. Lol.

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    @William Hochstedler

    Not quite robots.. but we provide solutions (integrate systems and program them) that allow our customers to automate their electrical testing needs in a production or verification environment.

    I'll definitely look into the turnkey options in Utah. How does Logan compare to markets closer to SLC?

    0Reply
  • Ruben Parra
    OP
    Real Estate Investor · Mission Viejo, CA · Member since 2015 · 24 posts · 5 votes
    11y

    Hey @Andy Mirza .. Ladera is a great community! It was only a few months ago that I was considering buying a place to live in, and was looking into Ladera or Rancho Santa Margarita. I would definitely look at either of those as ideal places to raise a family. That being said, since I'm still single I would hate to pay the incredibly high HOA fees in Ladera without taking advantage of the waterpark, playgrounds, etc. I bet you kids love all of that though!

    I kind of differ in the sentiment of having high prices and low rates as the ideal time to buy. I would much rather pay high interest on a bargain price, and refinance at a lower rate with an appreciated value down the road. I almost pulled the trigger on a $490K SFR in RSM with the though of house-hacking. Even so, my disposable income would be below a level I'm comfortable with.

    I  have a very nice situation going for me, in that I currently split the rent, and my share is only about 15% of my take-home pay. That situation my change in the next year or so, but being that I am debt free, I could still manage to both have enough to invest in RE and save up for a down payment when the time (or price) is right to buy my home :)

    1Reply
  • Clint Kreider
    Costa Mesa, CA · Member since 2012 · 146 posts · 55 votes
    11y

    @Andy Mirza @Ruben Parra 

    Great points guys. I think it is a challenging decision for a lot of renters in Orange County right now to decide between buying or continuing to rent. I am writing an article about it right now so it is great to hear your opinions. 

    0Reply
  • Edward Synicky
    Rental Property Investor · Yorba Linda, CA · Member since 2012 · 336 posts · 69 votes
    11y

    @Ruben Parra 

    Welcome new member! Bigger Pockets is the most innovative and educational site available to learn about real estate investing. Learn from those investors most active in the market today. You will find brand new people to the game and those that have been polished with years of experience, both good and bad. In my several decades of investing I have found that purchasing with cash flow as the number one goal and the secret to success in real estate. I have also learned that while buy and hold may be boring it is ultimately the best strategy. Use leverage but use it cautiously. Enjoy the experience.

    Wishing you the best!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free