First Post - New Member From California

33 Replies

Hello Bigger Pockets Network! My name is Lindsay and my husband and I are beginning our journey to real estate investing and future freedom. We live in South Orange County, CA and we are looking to purchase our first rental. We are currently seeking other states as the market out here is not conducive to our current goals. We are excited to be part of this community and eager to learn and eventually give back to others. We are serious about investing and any suggestions and recommendations are greatly appreciated!

Thank you!

@Lindsay Wyatt welcome to the local BP community.  You can find all you need locally by checking out the local meetups in the area.  You can network with like minded individuals and get all your questions answered.  

Good investing...

Hey @Lindsay Wyatt ! Welcome to BP! I'm in LA and I'm looking out of state too. I've found Indy, Cleveland, Jacksonville and KC to have great price / rent ratios. Pittsburg seems solid as well. 

Good luck with your search and let us know how you do!

Hi Lindsay! Oh man, I love Aliso. I used to go down there a good bit...pop over to Laguna... what a great area. I'm up in Venice. I also have always bought out-of-state properties so feel free to reach out anytime if I can be of any help!

Originally posted by @Lindsay Wyatt :

Hello Bigger Pockets Network! My name is Lindsay and my husband and I are beginning our journey to real estate investing and future freedom. We live in South Orange County, CA and we are looking to purchase our first rental. We are currently seeking other states as the market out here is not conducive to our current goals. We are excited to be part of this community and eager to learn and eventually give back to others. We are serious about investing and any suggestions and recommendations are greatly appreciated!

Thank you!

 Welcome to the site Lindsay. I'd imagine you'd want to look into the Midwestern turnkey markets. Cleveland, Dayton, Toledo, Kansas City, Indy etc..... All of them are pretty similar in regards to price point, tenant quality & rental yield etc.....

Originally posted by @Lindsay Wyatt :

Hello Bigger Pockets Network! My name is Lindsay and my husband and I are beginning our journey to real estate investing and future freedom. We live in South Orange County, CA and we are looking to purchase our first rental. We are currently seeking other states as the market out here is not conducive to our current goals. We are excited to be part of this community and eager to learn and eventually give back to others. We are serious about investing and any suggestions and recommendations are greatly appreciated!

Thank you!

 Hello and welcome! You have come to the right place! Best of luck to you!


Originally posted by @Lindsay Wyatt :

@Lance Rush-Mills How long have you been investing for? It's definitely a difficult market in this area. Where have you been searching for multi-fam apts?

Lindsay, I've been investing in CA deals for the past two years now. I have just pitched in with minority interest in apartments. Now I'm ready to tackle my own deals.

I've been looking closely at Georgia, Oregon, and Colorado right now and doing research on different sub-markets. I'm also trying to find different service providers in those areas so that I can have a good property manager, agent, etc.

How has your search been going so far? Have you honed in on any particular areas? What timeline are you thinking for trying to purchase a property?

@Lindsay Wyatt and @Lance Rush-Mills , our agent and PM business is based in Georgia and we work with a lot of clients from California. Let me know if you guys have any interest in information on specific areas in Atlanta where investors are getting good returns. Atlanta has become a hot market but you can still achieve a pretty solid ROI

@Lindsay Wyatt , Same story here. I'm from So Cal graduated  Cal State Long Beach but have been up in Sac for like 15 years now.

I am also looking out of state same usual suspects Indy, KC, Birmingham, Cleveland or Cincinnati, Memphis, and Birmingham or Montgomery.

I have talked to a few different turnkey providers, have a call with another tomorrow. Kind of in an accelerated research mode but I hope to have my first deal within 90 days and another 1 or 2 before the end of the year.

I have reached out to (or will soon) several of the people that have responded to you already. Feel free to message me anytime and we can compare notes as we both investigate & learn.

Chris

@Lindsay Wyatt Hi and welcome to BP! I think you are right in looking at the midwest if you want the best markets for cash flow at this point in time.  In Indiana, you might want to check out the NW corner, which is part of the Chicago metro area, but with Indiana's lower taxes and much more landlord friendly environment.

Welcome to BP & investing. I am in Birmingham so I'm bias to my market.

No matter what market you invest make sure you buy for the highest & best use of the property as well as, the right value approach. 

HBU is the low income areas for rentals since the rent amount & tenant pool is what drives demand.

HBU is the suburbs for fix & flips since the sales price & owner occupant pool is what drives demand. 

If you buy vacant in the suburbs for the 1% rule the value stated in an appraisal will be for an owner occupant, i.e., sales comparison approach. The appraiser will have done his job correctly stating the sales comparison value as the HBU. 

If you plan to rent the approach to value that you need is the income approach with rent multiplied by a gross rent multiplier. In the event you refi or attempt to sell tenant occupied it would be to another investor not an owner occupant so the cash flow is the only value applicable in that situation.

To realize the sales comparison approach to value the property would need to be vacant & renovated to sell to an owner occupant or refi for the amount borrowed.

For example, 

Purchased for $100k in the suburbs in a C area based on the sales comparison approach. 

As occupied the income value becomes $1,000(rent) × 75(GRM for a C area) = $75,000

Appraisals & loans need to be done for the HBU & current usage of the property. 

That's why the approach to value changes from vacant to tenant occupied. 

Don't get caught down the road when a tenant moves out & you need to renovate but can't because you've only been receiving  $100-200 a month cash flow & don't have the money to renovate or refi. 

I used to appraise & this is a little known fact about how properties are valued. If you invest for the HBU & proper usage based on your goals you will be successful. 

All Real Estate has headaches but investing properly for your goals will always leave you an exit when you need it.

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