Buy and Hold in Orange County

[Garrett Reza]

Hello,

I am relatively new to the world of investing, however I am looking to purchase my first property within the next 6 months. I have recently gotten my real estate license and am actually currently looking for brokerages to interview with.

My long term goals are to buy and hold several rental properties, and create a sustainable amount of cashflow from them. I am from Anaheim, CA and am looking forward to connecting with as many investors in the local area. 

[Logan Allec]

Welcome, @Garrett Reza.  As I told @Nathan Worden a few days ago, I believe that the best option for a young person looking to get started investing in real estate is to buy a triplex or fourplex with 3.5% down FHA financing. One thing to keep in mind when looking for an FHA owner-occupied triplex or fourplex is that 85% of the market rents on all the units need to cover your monthly payment (principal, interest, taxes, insurance, and mortgage insurance). This is known as the self-sufficiency rule. It only applies to 3- and 4-unit properties (not SFRs or duplex) bought using FHA financing. I put together a spreadsheet to help potential house hackers quickly analyze whether or not a property qualifies. There are other FHA requirements concerning which you should contact your local lender, but determining whether or not a triplex or fourplex meets the self-sufficiency rule is a good place to start as this rule will immediately eliminate many properties from your search, especially in expensive markets like ours.