New Investor In Los Angeles, CA

New Member Introductions

New Investor In Los Angeles, CA

Santa Monica, CA · Member since 2017 · 15 posts · 11 votes

Hi folks! My partner and I are just getting started, and I'm thrilled that BP exists! (I think I'm about 30 hours deep in the podcast already).

My partner is a software engineer who's handling capital generation for us with his day job, and I'm the investing education and leg work side of the team. Our initial focus is buy-and-hold rental cash flow, as I'll be first working to replace passive income from another business I'm currently closing. (about $2k a month).

We live in Santa Monica, and haven't chosen a market or niche yet. California seems a little brutal from a cashflow perspective, so I've started doing my practice analysis on properties in the midwest, but am totally open to alternate suggestions. Single family homes seem simplest, but I find myself really interested in small multifamily properties.

I'm about 2 weeks into my BP education, and am thrilled to watch the big holes in my knowledge begin to fill with learning!

Thank you all for sharing your guidance and experiences!

:-)

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Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes

8y

Welcome to BP! You're right that it's difficult to find cash-flowing deals in SoCal but it can be done! Do you own or rent? Househacking is awesome to get in the game if you rent. Rents are high here, but at least salaries are high. With some good fiscal management, you and your partner should be able to put together enough of a down payment to househack in a short period of time.

Cheers!

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Ray Lai
Investor / Vendor · San Diego, CA · Member since 2016 · 1k+ posts · 949 votes
8y
@Heidi Neilson
Welcome to BP! You're right that it's difficult to find cash-flowing deals in SoCal but it can be done! Do you own or rent? Househacking is awesome to get in the game if you rent. Rents are high here, but at least salaries are high. With some good fiscal management, you and your partner should be able to put together enough of a down payment to househack in a short period of time.
Cheers!
2 Reply
Jo-Ann LapinPro Member
Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
8y
Welcome to the community . Happy to assist and network
[email protected]
0 Reply
Ciprian L.
Real Estate Agent · Burbank, CA · Member since 2012 · 271 posts · 79 votes
8y
@Heidi Neilson Welcome to BP!
I would also suggest to start with house hacking if possible. Midwest cash flow looks better on the paper than in reality.
The locals will always get the best deals and sell overpriced properties to out of state investors.
If you decide to invest in the midwest you need to find a good local team and buy a lot of properties.
Good luck!
0 Reply
Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
8y
Originally posted by @Heidi Neilson:

Hi folks! My partner and I are just getting started, and I'm thrilled that BP exists! (I think I'm about 30 hours deep in the podcast already).
My partner is a software engineer who's handling capital generation for us with his day job, and I'm the investing education and leg work side of the team. Our initial focus is buy-and-hold rental cash flow, as I'll be first working to replace passive income from another business I'm currently closing. (about $2k a month).
We live in Santa Monica, and haven't chosen a market or niche yet.  California seems a little brutal from a cashflow perspective, so I've started doing my practice analysis on properties in the midwest, but am totally open to alternate suggestions. Single family homes seem simplest, but I find myself really interested in small multifamily properties.
I'm about 2 weeks into my BP education, and am thrilled to watch the big holes in my knowledge begin to fill with learning!
Thank you all for sharing your guidance and experiences!
:-)
Hello and welcome! Best of luck to you!
0 Reply
Edward P.
Investor · Los Angeles, CA · Member since 2015 · 52 posts · 11 votes
8y
Hey @Heidi Neilson
Congrats on finding BP its an amazing place to find what you need for all of RE. I have some properties in the not so good areas of LA county ("C" properties). I hope the best for you if you need any help let me know.
GL!
1 Reply
Dmitriy Fomichenko
Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
8y
@Heidi Neilson
Welcome to the BP family! Great that you joined the site! Here are some recommendations for you:
Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet
Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/
If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select the name of that person which should appear below the comments box. He or she will be notified of being tagged so that the conversation will continue.
Wishing you the best!
1 Reply
Manolo D.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
8y
Heidi Neilson Why would you give up a business that’s generating 2k a month passively?
1 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
Originally posted by @Ray Lai:

@Heidi Neilson
Welcome to BP! You're right that it's difficult to find cash-flowing deals in SoCal but it can be done! Do you own or rent? Househacking is awesome to get in the game if you rent. Rents are high here, but at least salaries are high. With some good fiscal management, you and your partner should be able to put together enough of a down payment to househack in a short period of time.
Cheers!
Thanks Ray! Will look into that option, for sure.
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Jo-Ann Lapin, @Tom Ott, @Edward P., @Dmitriy Fomichenko -- Thanks so much for the kind words and warm welcome!
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Manolo D. - It turns out sometimes even the little bit oversight needed for a "passive" business is more than you want to give it! On to bigger and better things.
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Ciprian L. - Yeah, we were first looking at C-neighborhood SFRs with a Turnkey company in Kansas City, it sounded amazing. Now that I've learned from BP about budgeting for CapEx, and the extra maintenance expenses at turn time with mid to lower grade neighborhoods, it's looking like the risks might quickly eat through the first-glance returns. If we do end up out of state, which I'm still drawn to, I'd really love to find a provider who includes those lines in their pro-formas.
0 Reply
Jeb Brilliant
Rental Property Investor · Long Beach, CA · Member since 2015 · 623 posts · 155 votes
8y
Hi @Heidi Neilson and welcome. Good choice on listening to the podcasts. May I suggest coming to the BP MeetUp in Santa Monica the 2nd Saturday of the month at UnUrban Cafe.
On a personal not I’m not a huge fan of turnkey because of the lack of exit strategies. Just something to keep in mind.
Good luck and if you have any questions about investing out of state let me know, that’s all I do.
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Jeb Brilliant Thanks for the heads up for the Saturday meetings, and also the TK exits. I'll be sure to make sure questions about that are on my list to ask potential providers, before going that route!
See you on an upcoming 2nd Saturday!
0 Reply
Account Closed
CO · Member since 2014 · 12 posts · 9 votes
8y
My husband and I also live in Santa Monica. We bought a TK house in Dallas 2.5yrs ago. We would not buy TK again at today’s prices. Our Dallas property has been doing OK, nothing spectacular. We’re looking to purchase our next property around LA. If you have the capital to work with, I think long term, it’s a better bet to buy a duplex in LA - live in one and rent out the other. You won’t live for free, but your housing cost will be lower and you’ll have a tenant paying down your mortgage. You’ll also have a much better chance for higher appreciation, which is the real wealth builder, not the $100/mo cash flow.
1 Reply
Manolo D.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
8y
Heidi Neilson What kind of business if you don’t mind? Maybe I know someone who wants to take over.
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
8y
Welcome to the site @Heidi Neilson
0 Reply
Yong ParkPro Member
Investor · Seal Beach, CA · Member since 2017 · 47 posts · 25 votes
8y
@Heidi Nelson Welcome to this amazing community. Like you , I too am a newbie here. I am taking the time to learn about real estate as well. Given the state of the market, I am fearful of making mistakes. I too live in socal. I would love to invest here for so many reasons. But I doubt I can. So I too am looking into other markets. I love to hear that there are local people who are succeeding at out of state investing. Again, welcome!
0 Reply
Krystle Padilla
Real Estate Agent · San Diego, CA · Member since 2016 · 46 posts · 41 votes
8y
Hi @Heidi Neilson welcome to BP! SoCal and the Bay Area are absolutely cut throat when it comes to real estate and it's becoming increasingly impossible to find good rentals for passive income. I am a local investor in the Morongo Basin (Joshua Tree, Yucca Valley, Twentynine Palms and Morongo Valley) and the prices you see here are similar to the Mid West. In this area you have a couple of things going on: the Twentynine Palms Marine Base and Joshua Tree National Park. The base provides a solid rental market in Twentynine Palms and the Park has seen almost 3 million visitors this year alone. The best part: It's totally affordable (and beautiful)! You'll see multi-family homes go from $140k+ and Marines have a guaranteed income. My husband is a licensed realtor and we are very familiar with the different aspects of investing out here. Feel free to reach out if you have any questions :)
0 Reply
Joseph M.
Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes
8y
Hi @Heidi Neilson , welcome to BP i'm in L.A too.
I look at Santa Monica prices occasionally and they are pretty nuts. Normal sized homes (1500 sq ft or so) for about $2 million plus last time I looked.
Best of luck to you in your investing!
0 Reply
Bryan Pham
Rental Property Investor · Oakland, CA · Member since 2016 · 602 posts · 250 votes
8y
As a native from LA! Welcome to BP!
0 Reply
Account Closed
Los Angeles, CA · Member since 2008 · 557 posts · 70 votes
8y
Hi Heidi,
I am also in Silicon Beach and much like your Partner I've often used my software development skills to help generate capital.
You will continue to find an abundance of knowledge, opportunities, connections and niche ideas on BP.
Welcome!
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Account Closed - Hi neighbor! Thanks for the input! For now, we've got a great rent-controlled little pad that's too great to give up to go the househacking route. We're talking about a future move out of state, and we'd love to do a live-in small multifamily, when that time comes. I'd love to hear about your progress with the LA purchase, let's keep in touch!
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@Manolo D. Thanks so much for asking, and thinking of connecting me with a business buyer. Aw man, if only I knew of this place, and posted about it months ago...
For now, it's being sold in parts, to the employees who helped me build it. After a lot of agonizing consideration, that emerged as the right solution for us.
0 Reply
Heidi Neilson
OP
Santa Monica, CA · Member since 2017 · 15 posts · 11 votes
8y
@James Wise - Thanks for the welcome! I'm stoked to go check out your podcast episode.
@Yong Park- Thanks for the welcome! I look forward to reading about your successes on the forums, as we learn together!
@Krystle Padilla - That's a fascinating possibility! Thanks so much for mentioning it. PM'ing you.
@Joseph M. - Nice to meet you! Yeah, the whole westside is bonkers. Walked by a newly reno'ed duplex in a medium sketchy part of Venice the other day... only $4million! :O
@Bryan Pham - Thanks for the welcome! As a Berkeley grad, enjoy that East Bay food!! :-)
2 Reply
Larry Fried
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
8y
@Heidi Neilson Welcome to BP! You may want to take a look at my BP blog Three Key Routes for Passive Real Estate Investing for some ideas.
0 Reply

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