Neophyte from Santa Barbara and Los Angeles, CA

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Neophyte from Santa Barbara and Los Angeles, CA

William Lu
Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes

Hi all, 

I'm William from Southern California, working in the cellular industry at Santa Barbara. I also visit LA quite often as I grew up there. 

So how I got here. Last week, my older sister highly recommended me to buy a house. I have much credence in her advice because she is in the restaurant business and owns multiple properties. This interest led me to youtube where I stumbled upon John Sonmez's videos on real estate investment. One of the video comments mentioned Bigger Pockets in which I found out to be the largest real estate investment community. A podcast here and there led me to introducing myself. 

I'm in the process of reading the Ultimate Beginner's Guide but I have a sense of what I want to get into. Buy and hold really appeals to me, however the 2% rule of thumb may be hard to find in Santa Barbara and Los Angeles. 

My current goals are to finish the UBG and assess my financial situation. 

Much obliged to meet you all. 

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Most Popular Reply

Chad Beuoy
Santa Barbara, CA · Member since 2017 · 10 posts · 1 vote
8y
Hi William! I’m an agent in Santa Barbara and Montecito, please don’t hesitate to reach out if you have any questions.
1Reply
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  • Chad Beuoy
    Santa Barbara, CA · Member since 2017 · 10 posts · 1 vote
    8y
    Hi William! I’m an agent in Santa Barbara and Montecito, please don’t hesitate to reach out if you have any questions.
    1Reply
  • Bryan ZuetelPro Member
    Attorney · Orange County, CA · Member since 2017 · 242 posts · 99 votes
    8y

    Welcome to Bigger Pockets.  If you feel called to Santa Barbara (and apparently being local), I would suggest that you house hack (the term should be in the UBG) a 2-4 unit property in Santa Barbara that you can work on, rehab, and improve.  I don't know that you will find anything in Santa Barbara city that will pay your portion of the mortgage, but maybe in some surrounding communities.

    1Reply
  • William Lu
    OP
    Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes
    8y
    Originally posted by @Chad Beuoy:

    Hi William! I’m an agent in Santa Barbara and Montecito, please don’t hesitate to reach out if you have any questions.

     Thanks Chad. 

    It's still very early for me but I'll keep you posted. 

    1Reply
  • William Lu
    OP
    Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes
    8y
    Originally posted by @Bryan Zuetel:

    Welcome to Bigger Pockets.  If you feel called to Santa Barbara (and apparently being local), I would suggest that you house hack (the term should be in the UBG) a 2-4 unit property in Santa Barbara that you can work on, rehab, and improve.  I don't know that you will find anything in Santa Barbara city that will pay your portion of the mortgage, but maybe in some surrounding communities.

     Thanks for the tips Bryan. I may search the surrounding communities of SB and LA, else I may look into out of state. 

    0Reply
  • Account Closed
    Los Angeles, CA · Member since 2016 · 36 posts · 16 votes
    8y

    @William Lu...if you're willing to venture into Ventura county I'm sure you could find a house hack that cash flows pretty well.

    Let me know the next time you're in LA County- I'm based in the San Fernando Valley and always down to meet up for coffee/hop on a quick phone call. 

    1Reply
  • Jose Guevarra
    Real Estate Agent · Mira Mesa, CA · Member since 2014 · 218 posts · 49 votes
    8y

    @William Lu Welcome to BP.  If you want a run down on the RE investor activity in Santa Barbara county, give me a call. I live in North County now but, I'm familiar with most of the groups on the Central Coast.

    1Reply
  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    8y

    @William Lu

    Welcome. SoCal can be a tough nut to crack for newbies.

    A couple years ago I mailed out lots of letters to homeowners in LA County with no luck.

    Then I tried rural Kern County and got a deal from a distressed homeowner in California City.

    The margins were not as large as they would've been in LA or OC, but I was able to rent it out for 2 years before fixing it up and selling it for a decent gain.

    Have you considered an owner-occupied small multifamily for your first deal?

    You only need to put 3.5% down, so cashwise it won't get in the way of other real estate goals you may have.

    My first deal was a 4-unit up I bought with FHA 3.5% in Santa Clarita.

    I lived for free (as opposed to paying rent) + enjoyed cash flow + built equity so it definitely didn't compromise my cash reserves.

    Good luck!

    Clarita CPA Group516 Reviews
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    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    8y

    Hi William! When you say your sister recommended buying a house....for yourself or just as an investment property?

    Not to be a huge buzzkill, but you won't find much in terms of nice rental properties in decent areas that meet the 2% rule anywhere in the country right now (which is absolutely not a deal-breaker, there are plenty of good properties out there), but you most certainly won't get it anywhere near SB or LA. You won't get it in CA at all. There's no cash flow in SoCal right now....which is what the 2% rule pertains to.

    There are plenty of options fro workarounds in general though! Happy to chat anytime. I live in Venice.

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    8y
    Originally posted by @Account Closed:

    @William Lu...if you're willing to venture into Ventura county I'm sure you could find a house hack that cash flows pretty well.

    Let me know the next time you're in LA County- I'm based in the San Fernando Valley and always down to meet up for coffee/hop on a quick phone call. 

    I'd be curious to know of any deals that would cash flow via house-hack in Ventura...if you know of any specifically, shoot me the numbers? (mostly because I've never heard of that)

    0Reply
  • William Lu
    OP
    Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes
    8y

    @Logan Allec, thanks for the tips.

    I've considered owner-occupied multifamily but prices are a bit steep in SB where I work. I would likely have to search for a nearby county to make this work.

    0Reply
  • William Lu
    OP
    Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes
    8y
    Originally posted by @Account Closed:

    @William Lu...if you're willing to venture into Ventura county I'm sure you could find a house hack that cash flows pretty well.

    Let me know the next time you're in LA County- I'm based in the San Fernando Valley and always down to meet up for coffee/hop on a quick phone call. 

    Thanks, I'll check out Ventura though it's likely I won't do a house hack due to distance from work.

    0Reply
  • William Lu
    OP
    Santa Barbara, CA · Member since 2017 · 13 posts · 5 votes
    8y
    Originally posted by @Ali Boone:

    Hi William! When you say your sister recommended buying a house....for yourself or just as an investment property?

    Not to be a huge buzzkill, but you won't find much in terms of nice rental properties in decent areas that meet the 2% rule anywhere in the country right now (which is absolutely not a deal-breaker, there are plenty of good properties out there), but you most certainly won't get it anywhere near SB or LA. You won't get it in CA at all. There's no cash flow in SoCal right now....which is what the 2% rule pertains to.

    There are plenty of options fro workarounds in general though! Happy to chat anytime. I live in Venice.

    Thanks Ali,

     My sister mentioned both options, buying for myself or investment. 

    It's likely that I'll invest out of state but I still need to spend a good amount of time researching for any viable options in SoCal or up and coming areas out of state.

    0Reply
  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    8y

    @William Lu Yes, you may have to go out in the boonies.  When I did the house hack, I couldn't do it close to Downtown LA where I worked at the t.  I had to do it about 50 miles away.  But it was worth it.  Good luck!

    Clarita CPA Group516 Reviews
    WebsiteView Page
    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    8y

    Spending some time researching is always a good thing and should definitely be done. But know that within your research time, a lot of people have already successfully done the research, so don't spend an inordinate amount of time reinventing the wheel. Don't necessarily trust every single thing someone tells you, but don't completely recreate it either. And definitely....compare SoCal to out-of-state stuff. My theory has always been that the more shopping you do, the clearer the bigger picture will be and you'll be able to know more confidently exactly what/where you want to invest and, more importantly, why. If someone can explain to me a sound reasoning for why they choose to invest in any particular place or thing, I will support them in that decision all day long even if it's not something I'd do for myself. 

    Anywho, off my soapbox :) Let me know if I can ever be of any help!

    1Reply
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