Hold or Exchange in Southern California

3 Replies

I bought a condo a few years back and got a great price on this fixer. Its a 2/2, single level condo with a 2 car garage. A very rare opportunity out here in Southern California. I purchased at $415k, updated it with about 30k in improvements and it is now worth about $625k a few years later.

Its been rented from day one with a great tenant at the highest rent in the community.

I refinanced last year and pulled about 90k out of it for other flip projects. Since then, it cashflows only about $150-200 a month. The principle is being paid off each month and my interest rate is quite low. The market here in Orange County has little to no inventory so we continue to see long term appreciation of 5-6% each year.

My goal is to buy larger multi-units both in state and out of state for more cash flow although this property is in a prime coastal area and Im not sure if I should exchange out of this one.

So do I HOLD or EXCHANGE Out and continue with my master plan? What would you do?

Thanks

hi @Bram Klein

I think every group has their preference on what the best strategy is. So depending on which thought process you subscribe to, you can hold onto your so cal property and cash flow all the way to and beyond retirement with what may likely be a class A tenant that rarely bothers you and pays their rent on time. 

Now, you said your long term goal was to own multi unit in and out of state. If this is your ultimate goal then you technically have answered your own question. A condo doesn’t fit into that goal, and you can exchange your capital info a better cash flowing property outside of CA. 

Depending on where you end up going, are you considering the class of neighborhood? Management? Etc? 

I have similar goals as you, but giving  up a cash flowing property in so cal next to the ocean would be a struggle for me as well. 

Good luck sir 

Originally posted by @Bram Klein :

I bought a condo a few years back and got a great price on this fixer. Its a 2/2, single level condo with a 2 car garage. A very rare opportunity out here in Southern California. I purchased at $415k, updated it with about 30k in improvements and it is now worth about $625k a few years later.

Its been rented from day one with a great tenant at the highest rent in the community.

I refinanced last year and pulled about 90k out of it for other flip projects. Since then, it cashflows only about $150-200 a month. The principle is being paid off each month and my interest rate is quite low. The market here in Orange County has little to no inventory so we continue to see long term appreciation of 5-6% each year.

My goal is to buy larger multi-units both in state and out of state for more cash flow although this property is in a prime coastal area and Im not sure if I should exchange out of this one.

So do I HOLD or EXCHANGE Out and continue with my master plan? What would you do?

Thanks

Sounds good, just be extra careful. Many CA OOS over pay for multis as they don't understand the OOS locations future dynamics.  Street by street, block by block stuff is not as common out here. 

For example, one could safely invest in West Hollywood,  Hollywood or North Hollywood,  an area with dozens of miles between including multiple zips and still be ok (throw a dart style). In many OOS locations there is no such thing. 

OTH this current investment seems to be producing passively ( appreciation). Some more well heeled investors find that part most attractive and many will pay premiums to get.

Good luck!

So hard to adore with out knowing your personal financial position. If you feel you won't have much mantience and the association is good. It sounds like a sort after location.

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