Young & Ambitious Investor from Southern Cali!

3 Replies

Hello BP Fam!

This is my first official post as a BP community member. I live near Santa Barbara, California in a town known as Lompoc. I am 23, I have a degree in Business Administration.I currently work as a finish carpenter and have been working construction in both commercial and residential settings for 2 years. While working in the field I always tell myself to work smarter not harder and I feel this is the same for real life. I know for many of us real estate falls under that same ideology. For me it will reduce the amount of wear and tear on my body and it very well can put me on a path to early retirement, and is financially proven to provide higher return than even the stock market. 

Where I live houses are ranging from 280k-350k for your typical SFR.I have enough saved to put down about 15%, leaving me with about 3 months in reserve. I plan on house hacking my first year then transitioning it into a complete rental, I am just waiting for a good deal to come on the market.

Aside from construction for the past 6 months I have begun to grow my network in the wholesaling realm of real estate. At one point I had 3 properties that I brought to a few investors/ cash buyers that I had got in contact with through my network and by the time they decided to pull the trigger it was to late or the price they offered was a low ball offer out of greed. I am looking to network with new individuals both wholesalers and investors to get some future deals locked in. Please feel free to reach out at any point! Thanks & hope to hear from you soon. 

@Richard Reyes Hi Richard,

Welcome to BP! You're on the right path by coming on here and starting the process. You've got a huge advantage that you know construction so you can put some sweat equity and grow your portfolio further. The great thing is you don't need that many properties to set yourself up.

I'm not too far over in Santa Ynez. The market is quite different but the principles are the same. 

@Allen Maris thank you for the response!

I completely agree, I have thought that exact thing!

I’m curious, when you look for properties do you base your decision on appreciation ? Or cashflow ? In Lompoc the mortgage on a property at 3.5-7% down is anywhere from $2000-2300. Where rent is at $2,100 in a good neighborhood. Are you experiencing this as well?

@Richard Reyes , I've learned the hard way in 2007/08 to never buy based on appreciation because it may not happen or it may take 10+ years. One of my properties in Phoenix is just now back to even after losing 50%+ value. 14 years later. (I was young and new and BP was just starting.) So my investment play now is to only buy on cash flow (for buy and holds) and hope that appreciation will be a nice bonus. 

And yes, you're seeing the problem firsthand that many parts of CA experience. You have to make a much larger down payment just to cash flow, thus tying up your money for hardly any return if at all. I'm sticking to my local market for SFRs so I've only been looking with an eye towards flipping since the buy and hold financials don't make any sense to me at the moment. They will at some point and I'm slowly starting to see DOM increase, reductions and lower sales price percent vs asking. All signs of a slowing market. My crystal ball won't tell me how slow it will get so I'm watching and waiting to see where things head. 

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