New member from Los Angeles

8 Replies

Hi BP! Just started learning about real estate investing and getting interested in it through listening to the BP podcast and reading. Still very new but interested in taking the plunge soon, as I'm planning on buying a family house this year, and the goal of purchasing at least one rental property the next. I firmly believe in being well-educated when making these large decisions.

I've lived in LA for the last 10 years and love it.  Grew up in the Columbus area and am interested in perhaps investing there in the future as well.  Really enjoy the weather and lifestyle (hate the traffic), and am a little apprehensive by the really high prices for houses in the area.  Play basketball for fun and consulting for a pharmaceutical company for work. My goal and reason for real estate investing is to be able to have passive income to support my family (have a 1 year old, and possibly more on the way) and be able to spend more time with them.  

Look forward to networking with others and learning and contributing in the future!

Welcome to BP @Wei Li !

You came to the right place. Have you thought about house hacking? It can help with the high prices, but it can be difficult to do with a family. I also have a one year old and am looking for possible house hacking opportunities here.

Where in LA have you been looking?

Hi Eric!

I'm looking in the Valley, around the Woodland Hills area.  I've thought about house hacking, but haven't looked at the numbers yet; I imagine it should be much more profitable than a single home. However, having a family does make me a bit wary being that close to tenants; would love if others who have done it with a family have any experiences to share.

@Wei Li

@Eric Dowling

Is right. House hacking is a great way to get started. We started with a duplex, but as our family grew we did move into a SFR. FHA is a great way to get started with little money down. Welcome to the site!

@Wei Li  

Welcome to BigggerPockets! Below are some links to get you started. Much success to you!

I received this info from @Nathan Sharp when I first started.

https://www.biggerpockets.com/renewsblog/2013/11/02/hack-housing-get-paid-live-free/ (House hacking)

https://www.biggerpockets.com/renewsblog/2014/03/13/investing-multifamily-ben-leybovich/ (Podcast 061 - How to succeed in multifamily investing)

https://www.biggerpockets.com/renewsblog/2013/04/09/how-to-buy-a-small-multifamily-property/ (How to buy a small multifamily property)

https://www.biggerpockets.com/renewsblog/2015/11/16/how-to-choose-areas-multifamily-deals/ (Choosing multi-family deals)

http://www.biggerpockets.com/renewsblog/2014/07/19/how-to-buy-a-duplex/(guide to buying a duplex)

https://www.biggerpockets.com/renewsblog/2013/12/12/bp-podcast-048-duplex-managing-tenants-darren-sager/ (Duplex investing)

Now that you have made the move, below are some links that will help with the navigation of the site.

https://www.biggerpockets.com/courses/a-beginners-introduction-to-real-estate-investing (video courses)

https://www.biggerpockets.com/real-estate-investing (Ultimate beginner's guide to REI)

Before your 1st purchase, please ensure you visit the below link for some tips.

https://www.biggerpockets.com/renewsblog/2014/12/19/real-estate-investing-success-smart-tips/

REI books suggested by BPers

https://www.biggerpockets.com/renewsblog/2015/11/13/7-real-estate-books-beginner-investors/ (7 absolute must read books for beginner REIs)

http://www.biggerpockets.com/renewsblog/2013/04/14/best-real-estate-books/?utm_source=search&utm_medium=internal&utm_campaign=books (books recommended by BPers)

Simply, bone up on the areas that you need to expand knowledge in such as, Forums, Marketplace, Learn, Network, Analyze and Resources.

Continue to feast on the Podcasts, #askbp Podcasts, blogs and webinars

@Wei Li yeah, house hacking can work out really well if you are willing to go that route. I like properties with two houses so you don't share a wall with tenants. There are definitely options in Woodland Hills.

@Wei Li "I've thought about house hacking, but haven't looked at the numbers yet; I imagine it should be much more profitable than a single home."

You've got that right, brother. And it certainly is possible in LA. I recently picked up a fourplex in Santa Clarita using 3.5%-down FHA financing, and it cash flows.

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 here 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.

Originally posted by @Logan Allec :

@Wei Li "I've thought about house hacking, but haven't looked at the numbers yet; I imagine it should be much more profitable than a single home."

You've got that right, brother. And it certainly is possible in LA. I recently picked up a fourplex in Santa Clarita using 3.5%-down FHA financing, and it cash flows.

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 here 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.

Thanks Logan! Would love to chat about your 4-plex purchase and your experience with it. If the numbers make sense, I'm definitely open to it, although our family, having just started, is a little risk averse and not sure if jumping into managing a fourplex would be too much at once. Definitely interested in those low down payment FHA mortgages though (seems the only way to go actually in LA).

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