Hey Bigger Pockets Community!

My name is Josh. I recently graduated from UC Berkeley with my degree in business and I am currently working as an Administrative Assistant for a construction company. I’ve been interested in real estate investing for a long time and I am currently studying to get my real estate license. The information that I have gotten here has been amazing! My goal is to keep learning, network, and make my first investment into a duplex or triplex in the Los Angeles area within the next 6 months.

I’m looking forward to connecting with some of you!

Welcome Josh,

Keep learning and improving... and please please please don't buy a duplex or triplex in LA or anywhere in CA in the next 6 months!! Go out of state, sell stuff locally, or wait for better times (I don't advise this to anyone who seriously wants to be an investor).

All the best-

Thank you for the welcome and advise @Elliott Elkhoury !

Can you expand on your thoughts of the California real estate market?

Do you think the market is headed for a downturn soon and that homes are going to depreciate in value or do you recommend looking out of state for other reasons?

Originally posted by @Joshua Jackson :

Hey Bigger Pockets Community!

My name is Josh. I recently graduated from UC Berkeley with my degree in business and I am currently working as an Administrative Assistant for a construction company. I’ve been interested in real estate investing for a long time and I am currently studying to get my real estate license. The information that I have gotten here has been amazing! My goal is to keep learning, network, and make my first investment into a duplex or triplex in the Los Angeles area within the next 6 months.

I’m looking forward to connecting with some of you!

 Welcome aboard Josh.

Keep learning and improving... and please please please don't buy a duplex or triplex in LA or anywhere in CA in the next 6 months!! Go out of state, sell stuff locally, or wait for better times (I don't advise this to anyone who seriously wants to be an investor).

All the best-

With the exception of "keep learning and improving", I don't think this is good advice at all and is very general in nature, not to mention highly opinionated with no explanation for the opinion.

Almost anytime is a good time to buy so long as you buy right and have a plan, along with multiple exit strategies. There is not just one way to buy a duplex or triplex in LA, rather, numerous ways to do it and numerous strategies that go along with it. Make sure your numbers work for your plans and goals and move forward with educated and calculated decisions. This rings true no matter where in the world you choose to invest.

@Will Barnard you're right, it was a very short post without much clarity or explanation.

What I meant to express to @Joshua Jackson was that I don't think it's a good idea for a new investor looking to get into buy and hold to pick up a residential rental property in one of the country's most volatile real estate markets, during a peak economy (which has been extended artificially moreso than any bull market we have seen in our lifetimes due to multiple rounds of QE- now called POMO), with a long with a long term hold strategy. 

Exit strategy can make this kind of purchase a more profitable idea. Value add helps too. If a newer investor can swing finding a great deal and adding value through improvements, etc... and perhaps mixing in creative management strategies that a lot of investors in big cities use to make 2019 work, then they would have a property that could cash flow acceptably with a nice equity buffer.

I think these are big "If's" to execute on for a new investor, although not impossible by any means. 

Will, you seem to be very active in this kind of market and much more informed than I. If Josh could create a scenario like the above at the tip top and have lets say... 40% equity in a property, would you recommend he exit sooner than later? Or see the property through a downturn? Would holding a property like this during a downturn slow down his potential to take advantage of that equity position? 

I'm curious what kind of scenarios you see as the most profitable for a newbie looking to break out into the game in CA markets, today.

Originally posted by @Elliott Elkhoury :

@Will Barnard you're right, it was a very short post without much clarity or explanation.

What I meant to express to @Joshua Jackson was that I don't think it's a good idea for a new investor looking to get into buy and hold to pick up a residential rental property in one of the country's most volatile real estate markets, during a peak economy (which has been extended artificially moreso than any bull market we have seen in our lifetimes due to multiple rounds of QE- now called POMO), with a long with a long term hold strategy. 

Exit strategy can make this kind of purchase a more profitable idea. Value add helps too. If a newer investor can swing finding a great deal and adding value through improvements, etc... and perhaps mixing in creative management strategies that a lot of investors in big cities use to make 2019 work, then they would have a property that could cash flow acceptably with a nice equity buffer.

I think these are big "If's" to execute on for a new investor, although not impossible by any means. 

Will, you seem to be very active in this kind of market and much more informed than I. If Josh could create a scenario like the above at the tip top and have lets say... 40% equity in a property, would you recommend he exit sooner than later? Or see the property through a downturn? Would holding a property like this during a downturn slow down his potential to take advantage of that equity position? 

I'm curious what kind of scenarios you see as the most profitable for a newbie looking to break out into the game in CA markets, today.

Anytime anyone can have say 40% equity as you stated, they have a deal in any market condition. Expecting that kind of spread for a newbie would be almost impossible and certainly a grand slam home run in game 7 of the series!

If a CA buy and hold Investor could buy right with a decent equity position of 20%, should he or she hold during a downturn? That is difficult to say as well as it depends on numerous factors such as goals, the extent of the downturn, the reasons for the downturn, where specifically the property is, what kind of cash flow it kicks off, etc, etc, etc. Sorry I can’t be more specific but your hypothetical above is very difficult to answer without more specific facts. 

@Will Barnard

What would you do with a 3plex in Santa Clarita, let's say in a B neighborhood, that came into your possession in stable condition and at market rents with a 20% equity position? 

Sure, your goals may be different than mine, or Josh's- but new investors seek out the opinions and strategies of successful investors like yourself (nice flips btw), because they're often still formulating their goals and long term plans with the help of people who have already made it work.

If it were me I would sell it off and reinvest the money in more exit opportunities through the remainder of this high market, until I the market begins to move in the other direction, where I would incrementally begin to rebalance my strategy and keep more inventory through the markets future trough. I'm also a full timer in REI and want to keep working in it for another 20 or so years before "retiring", so maybe my plan is relevant or of interest to few.

Originally posted by @Elliott Elkhoury :

@Will Barnard

What would you do with a 3plex in Santa Clarita, let's say in a B neighborhood, that came into your possession in stable condition and at market rents with a 20% equity position? 

Sure, your goals may be different than mine, or Josh's- but new investors seek out the opinions and strategies of successful investors like yourself (nice flips btw), because they're often still formulating their goals and long term plans with the help of people who have already made it work.

If it were me I would sell it off and reinvest the money in more exit opportunities through the remainder of this high market, until I the market begins to move in the other direction, where I would incrementally begin to rebalance my strategy and keep more inventory through the markets future trough. I'm also a full timer in REI and want to keep working in it for another 20 or so years before "retiring", so maybe my plan is relevant or of interest to few.

I likely would not entertain such an investment in Santa Clarita, however, hypothetically speaking, I would probably sell it and roll the profits into other assets that could either kick off more cash flow returns or into flip projects that could build a larger nest egg to reinvest when the market (or shortly after) corrects downward. Keep in mind I would not sit on the sidelines waiting for the market to do something different, rather, I would continue to work the market with the strategy that was the most profitable at that time as I too will continue to be an active real estate investor for the next decade or so.

For buy and hold positions, I prefer a larger building over a small multi or SFR when the strategy is cash flow.

@James Wise Thank you! It’s great to be here. 

@Will Barnard & @Elliott Elkhoury

I appreciate this discussion. Although it would be great for me to invest locally in Southern California, I’ve also been considering markets in Fort Worth and Houston Texas. Hopefully after getting my license, networking, and starting to generate leads, I will find some great deals!

@Joshua Jackson I love the phrase "generate leads". Off market is the way to go sir!

Hello, Joshua. You’ve taken a great first step in real estate investment. I wish you all the best. 

@Joshua Jackson

Welcome to the BP family! Good to have you here!

Here are some recommendations for you:

Find and connect with other BP members that are in your area: https://www.biggerpockets.com/search/users

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: https://www.biggerpockets.com/podcast

Wishing you the best!

@Joshua Jackson congrats on graduation and thnking ahead. I did the same thing right out of college. One piece of advice...keep a good cash reserve. Things happen. And they always cost $$. 

The advise and words of encouragement alone have made joining this community an amazing experience!

I have been been doing research on out of state wholesaling (other forum posts). So far, this is what I’ve gathered:

1. It may not be the best thing to do for beginners (thought?). 

2. Also that you should have a strong buyers list 

3. You need to have a system for determining good deals

4. Direct mail marketing to distressed owners is effective 

5. Submit a lot of offers that meet your requirements for a good deal

If anyone has any additional notes, tips, or words of advise, I would love to hear them.