Beginner in SoCal - Realistic expectations and action plan
Hi everyone, my name is James and currently live in Rancho Cucamonga, CA
I've been interested in real estate for a long time, but only recently started looking into it more. My current goal is to house-hack my first property and eventually buy-and-hold enough properties to generate long term passive income for financial independence. I'm still solidly in the learning stage and would really appreciate any tips on starting, getting realistic expectations, and next steps.
I currently make ~52k/year, I know it's not a whole lot especially out here in California. However, my credit is spotless. My credit score has been as high as 838, but now hovers around 812 after paying off my car loan early. I have no debt whatsoever and am extremely frugal. Currently saving at least 2k/month and have 30k in cash. I'd really like to buy my first property in about 18 months, by then I should have ~60k in cash. Additionally, I have ~55k invested in my Roth IRA and 60k in a high yield CD. Only caveat is that the CD belongs to my mother; I'm safeguarding the funds for her. Will this make my loan application look better?
What are some realistic expectations? What kind of loan would I be able to get? What should my next steps be? Ideally I'd like to house-hack further west towards LA where I'm originally from, but I'm assuming I'd probably be priced out? Should I start off trying to find something in the IE instead?
Most Popular Reply
Rancho! My parents live in Redlands so I'm through there a lot.
First, learn to work the numbers. If you don't know how to work those, you're bound to get screwed somewhere along the way. You have such a good savings and all that building, you don't want to mess it up.
Househacking is doubtfully going to be profitable. Cash flow in SoCal in general is basically non-existent, and the further west you go, the worse it will get.
So yes, do all of those things you list, but long before them... learn what makes for a good property and learn how to run the numbers. If you don't know those two things, none of the answers to those other questions will help you.