New Investor in SoCal, excited to get started!

14 Replies

Hello BP community!

I live in Simi Valley, CA (northwest of Los Angeles). A friend suggested I join this site immediately when I expressed interest in real estate investing.

I am trained as a near eastern archaeologist and teach at UCLA. However, the combination of long work hours, little compensation, and minimal schedule flexibility have brought me to the realization that a change needs to be made. Real estate investing seems like a great solution. I am here to learn all I can (and I have a LOT to learn), network, and contribute to an exciting community that is focused on succeeding. The real estate areas I am interested in are house hacking and short term rentals.

My 2020 goals are to purchase a multi-family that will produce enough cash-flow to cover my mortgage payment and to develop a plan to become financially free by the time I turn 40 (8 years from now). I'm pretty good at learning on my feet and I'm excited about a job where hard work has the potential for massive payoffs. I am currently trying to figure out which neighborhoods north or west of Los Angeles would be best to rent in. Also, figuring out the specific short term rental regulations for each city. My immediate plan is to start by renting my primary residence through Airbnb while I am traveling and then look at turning an apartment rental into an Airbnb. I'm finding that there are a lot of legal constraints to understand first. Onward and upward! 

Looking forward to being apart of this exciting community!

Welcome to BiggerPockets! Truly nice to meet you. Good luck going forward! 😁 First suggestion is to watch or listen to podcasts and webinars, if you have not. Another thing maybe to research for a mentor. Figure out what that person needs and bring them value. 

With your current line of work, research census data for patterns. This is something I am trying now to learn. Hope the best for you.

@Nicholas Schulte

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Wishing you the best!

Welcome to BP Nation Nicholas. I live in Santa Clarita and do most of my investment and business in the San Fernando Valley just over the hill from Simi. In addition to what has been said, I also suggest you attend some local real estate meetups around town and get to know some of the more experienced players around here. There are many nuggets you may pick up from that. Do stay clear of the sales pitches and gurus and focus on solid education, not gimmicks.

Welcome to Bigger Pockets. I admire your determination and smarts to read up on short term regulations. When I was a short term host in Los Angeles, I got involved with Airbnb's group focusing on that. The group actually had issues with short-term hosts in a lot of communities not realizing that they lived in the city of LA and were subject to its regulations. Think Sherman Oaks or Van Nuys. It pays to surround yourself with a team that knows how things work... or don't work in the area where you'll be investing. I also echo watching out for sales pitches and expensive prescribed programs. I live in Santa Clarita and I have multifamily and pooled investments in and outside of California. Welcome to the club. 

Hi Nicholas! Very cool you're in Simi... I have a couple really close friends there and have spent an inordinate amount of time there over the last couple of years! So a couple points about what you're talking about... all of which may unfortunately sound like big buzzkills...

- West LA has banned AirBnB unless the property that's being AirBnB-ed is owner-occupied, and even then there are pretty notable constraints. I don't know the exact locations that ban ends, but make sure you know what properties fall into that.

- Very few landlords/property owners will allow a renter to AirBnB their apartment anymore. They got hip to that game a long time ago, and most leases forbid doing it or any other kind of subletting. So you'd have to find somewhere that doesn't have that in the lease (not likely on the west side).

- If cash flow is the name of your game, LA/SoCal isn't the spot for it. Not to say LA/SoCal can't be good for investing, but if passive income via monthly cash flow is what you want for financial freedom or flexibility, you won't get that here. Most SoCal-ers looking for cash flow invest out-of-state.

Like I said, my intention isn't to sound like a buzzkill, but to make sure you are aware of some realities that could mess you up a little. I think starting with AirBnB-ing your place when you travel is a perfect start, and then just keep researching on what else to do. Just make sure you know exactly what you're getting into with any strategy, and then you'll do great!

@Ali Boone

Hi Ali, great to meet you! These are exactly the insights I'm trying to learn, thanks so much for sharing! I know there's a way to be successful in STR, I just need to keep researching and refining the strategy.

Do you know if there's a good way to find out what the STR restrictions are for different areas? When I was researching the west end of LA I couldn't find a clear answer. Technically there's a new law but it's not currently being enforced and only some of the STR owners register and Airbnb is dragging their feet about handing over their records to the city... The matter seemed a bit ambiguous to me. With other areas I might find articles about the city council discussing a ban but not a definitive answer.

@Nicholas Schulte

Congratulations on taking the first step. I was a biologist when I did my first deal almost 3 years ago. Analytical skills are an aid to being an RE investor. I just quit my day job 2 months ago and now I RE full time.

I’d think about getting a large house in northern areas of North Hollywood and doing the house hack with roommates thing if you’re looking to cover your mortgage. MF here is tricky due to tenants rights.

I don’t confuse living in real estate with investing in real estate. I rent an amazing apartment in a central walkable area. One of these days I’ll buy a primary residence. I really think it’s better to focus on becoming an accredited investor before you buy a primary residence. Just my two cents.

The awesome thing about RE is that there are so many different ways to make money with it. So you can have your own personal strategy and philosophy around it.

Originally posted by @Nicholas Schulte :

Thank you everyone! These are very helpful suggestions.

@Will Barnard 

How do I find out more information about these local real estate gatherings? Attending is a great idea! I would love to connect with like-minded people nearby.

Many of them post right here on BP. Look at the marketplace forums as well as the events and happenings forum threads. FIBI events (for investors by investors) are by far the best in my opinion as they do not allow any sales pitches whatsoever and the organizers are great guys. They have many chapters around So Cal. 

As to actual investments and which you prefer to go after, only you can make that decision but do pay attention to any advice given and what their motives may be with said advice. The guy in beer sales is going to preach that beer is the best to drink while the guy that sells soda is going to preach soda is the best.

Originally posted by @Nicholas Schulte :

@Ali Boone

Hi Ali, great to meet you! These are exactly the insights I'm trying to learn, thanks so much for sharing! I know there's a way to be successful in STR, I just need to keep researching and refining the strategy.

Do you know if there's a good way to find out what the STR restrictions are for different areas? When I was researching the west end of LA I couldn't find a clear answer. Technically there's a new law but it's not currently being enforced and only some of the STR owners register and Airbnb is dragging their feet about handing over their records to the city... The matter seemed a bit ambiguous to me. With other areas I might find articles about the city council discussing a ban but not a definitive answer.

I don't know on that one, no. But I would consider all of that if you're thinking of buying out here and it being a STR rental only strategy... whatever isn't passed now is likely going to go into effect at some point, so what would happen to your investment if that happened? The other thing with the west side is I don't know that your numbers would necessarily work anyway. Like how much could you make in a month compared to what your mortgage would be? Just be sure to 1) always know your numbers and 2) confirm your contingency plan and it's numbers.

 

Welcome to the community and I truly love your goals. You will definitely find a ton of useful information here.

Happy investing!

Hey @Nicholas Schulte  and welcome to Bigger Pockets! Bigger Pockets is the ultimate game-changer when it comes to successful real estate investing. Bigger Pockets is the only way to go when networking with other investors and getting deals done correctly. Congratulations and I wish you all the best. You are not alone in your real estate ambition.

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