New Member From Los Angeles

[Matt Friedman]

Hello BP forum! I have been learning a lot from this site in just the last few hours that I have joined. It is definitely overwhelming with the amount of information loaded on this site. I am eager to start REI, specifically Buy and Hold with a partner just to get my feet wet (most likely duplex, triplex, etc...). However, being in Los Angeles I have read numerous times that due to the RE climate here that it can be very difficult. I know that it's not impossible, but does it make more sense to invest out of state for a first timer?

I look forward to learning from all members who have posted in the past as well as everybody who post's in the future!

[David Faulkner]

Don't give up on your local market just yet. Yes, it is hard to find a deal, and the reason why it is hard to find a deal is because there is high demand and limited supply of housing, which is also why we have some of the best long term appreciation rates (of both prices and rents) in the country. Out of state you give up your home court advantage, significantly increase your risk by going to a market you are less familiar with, give up almost complete control over your investment and instead will be nearly 100% reliant on the kindness of strangers to keep your best financial interests at heart and make or break your investments for you. And the reason that it is less expensive out of state is usually the exact opposite reason as it is hard to find a deal in LA, there is much less demand and higher supply of housing ... even if the cash flow on day one appears high, if the rent increases don't keep up with inflation then CapEx will eat your lunch in the long haul and you will be losing purchasing power each and every year. There are different methods for making returns in these markets, but it is way harder and riskier IMO for a new out of state investor. Selling property and RE services to out of state investors is however highly profitable for the locals in those markets and other marketers, and there are many providing such services on BP that will gladly talk up the benefits of investing out of state. Be careful about asking a barber if you need a haircut, though.