Need advice on what to do with Up to 200K

Los Angeles County, California
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Need advice on what to do with Up to 200K

Jadan Williams
Member since 2024 · 3 posts · 8 votes

Hello bigger pockets experts, I currently live in california but will list my house for sale within the next couple months i want to use between 100-200k for an investment but not sure how to go about it. My original plan was to find a 4 plex in california buy using fha loan, move out after the first year and generate cash flow and appreciation, but after looking at properties it became clear to me that’s not possible with todays market and interest rates. I now am looking all over the country, thinking of trying to find a duplex that’s has land where i can add more units in the future, or just a small apartment building, honestly I dont know at the moment just wanted some feedback from people who know more than me 

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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
1y

First piece of advice....don't come here and tell people you have $200k to invest.

Second piece of advice, understand what you want before you look. Once you know what you want, you then know how to look. If you're indecisive right now, get some conviction. Once you have conviction, work on your discipline. When you have both, it's very hard to quit and when you find it hard to quit-- it's likely you won't fail. 

Third piece of advice, it's too general for me to say Ohio sucks. But go back to my first piece of advice and see where all the predators will circle.  And do the math. House hacking is a farce for many reasons, also. 


Fourth piece of advice...don't believe people's advice that have something to sell you without fully verifying & doing your diligence.

Really dig in on #2 before you do anything. 

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  • Jake AndronicoBusiness Member
    Realtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
    1y

    @Jadan Williams

    If your job is flexible enough to allow you to live anywhere, that's an amazing place to be. 

    The downside to having almost unlimited options is narrowing your focus. 

    House hacking has completely changed my life (I've done it twice in Reno, NV), and I highly recommend it as a strategy starting off. 

    Staying between 1-4 units is optimal because of the financing. 5+ is a nightmare with financing right now. 

    If you're willing to have roommates, your options open much more broadly, and you can potentially assume a loan with a low interest rate. 

    Hope this helps! 

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  • Joseph Bui
    Lender · Nationwide · Member since 2023 · 362 posts · 237 votes
    1y

    Hi Jadan, I'm based out of the seattle area so I'm in a similar situation. I mostly invest in midwest markets. I have a portfolio of 10 properties across Memphis and Detroit and would be happy to connect and knowledge share if you are interested.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Jadan Williams

    If I were in your shoes, I’d start by clearly defining my investment goals and identifying target markets with strong job growth, population increases, and development potential. I’d focus on property types that align with my strategy, leveraging financing options that fit my budget. To build momentum, I’d start small, assemble a reliable local team, and ensure the properties I invest in have strong fundamentals. Staying flexible and partnering with a skilled property manager or agent would be key to achieving long-term success.

    Good luck!

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  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    1y

    Check out Ohio! We have a reasonable cost of living and properties are significantly less than CA. A $100-$200k down payment would get you a decent multifamily property, possibly with land depending on where you look. 

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  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    1y
    Quote from @Jadan Williams:

    Hello bigger pockets experts, I currently live in california but will list my house for sale within the next couple months i want to use between 100-200k for an investment but not sure how to go about it. My original plan was to find a 4 plex in california buy using fha loan, move out after the first year and generate cash flow and appreciation, but after looking at properties it became clear to me that’s not possible with todays market and interest rates. I now am looking all over the country, thinking of trying to find a duplex that’s has land where i can add more units in the future, or just a small apartment building, honestly I dont know at the moment just wanted some feedback from people who know more than me 


    Hey Jaden! Have you tried looking for a duplex instead of a 4 unit? Not sure about prices there but it would help kick start your REI journey. Outside of that, I am in a lower barrier to entry market of Cincinnati/Northern Ky. Not sure if you are wanting to move OOS or just invest OOS, but I would love to talk some more about it to see if there is any way I can help guide or answer questions for you. Shoot me a message if you are open minded to that!

    [email protected]859-443-4952
    Sam McCormack Realtor
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  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votes
    1y

    @Jadan Williams

    CA can offer some good long term investments. Despite all the negativity people still want to live in CA. If you want to stay then you will find a deal that makes it work. If you do want to leave CA there are multiple options and chose a place where you would want to live. Usually that means others in your demographic live there or will want to live there.  

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Jadan Williams:

    Hello bigger pockets experts, I currently live in california but will list my house for sale within the next couple months i want to use between 100-200k for an investment but not sure how to go about it. My original plan was to find a 4 plex in california buy using fha loan, move out after the first year and generate cash flow and appreciation, but after looking at properties it became clear to me that’s not possible with todays market and interest rates. I now am looking all over the country, thinking of trying to find a duplex that’s has land where i can add more units in the future, or just a small apartment building, honestly I dont know at the moment just wanted some feedback from people who know more than me 


    It honestly depends where in California. If you are looking in Los Angeles, than you will likely not find many opportunities on the MLS based on today's rates, unless you put a large downpayment. You will likely need to find a property that will cover most of your mortgage payment, but not all of it. The good thing about CA, is once you do source a deal, you are pretty much set. Appreciation here is good and likely to continue as long as people want to move in the area, and housing inventory is still low.

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  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1y
    Quote from @Jadan Williams:

    Hello bigger pockets experts, I currently live in california but will list my house for sale within the next couple months i want to use between 100-200k for an investment but not sure how to go about it. My original plan was to find a 4 plex in california buy using fha loan, move out after the first year and generate cash flow and appreciation, but after looking at properties it became clear to me that’s not possible with todays market and interest rates. I now am looking all over the country, thinking of trying to find a duplex that’s has land where i can add more units in the future, or just a small apartment building, honestly I dont know at the moment just wanted some feedback from people who know more than me 


    Hi Jadan, I was in the same shoes when I was priced out of where I lived (Portland OR) so I decided to move to Columbus OH. I started with a house hack then purchased my own rentals/BRRRRs and now I own a successful 7-figure rental portfolio. Columbus is rapidly growing, with the population, job market, and growing tech scene driving strong rental demand. We are still seeing positive cash flow deals here with lots of potential for appreciation. Happy to send over some resources on why Columbus is a great real estate market to invest in!

    [email protected]614-300-7535
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  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    1y

    I'd buy as many cash flowing SFR with 20% down as you can. I've spent less than 150k total out of pocket investing in RE in the last 9 years and have been buying "base hits" in Dallas and Arkansas and now have 29 SFR. Once you get going, your appreciation will be great over time so you can recycle the equity to buy more and more properties. Give yourself 10 years with that 200k and you'll be set for life with real estate cash flow. Trust me.

    0Reply
  • Jim PfeiferBusiness Member
    Investor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
    1y

    I think the first question is do you want to be an active investor or a passive investor?  If you want to be active, you will get a lot of good advice on this Forum about what market to invest in and what type of active property.  For active investing it is also helpful to have some type of advantage that sets you apart from other investors - that could be construction or rehab skills, market knowledge or anything else that gives you an edge.

    I was an active investor and didn't really have any of those skills.  Fortunately for me, I started investing a time in the market where everything went up.  Even though I wasn't a good asset manager, I made money on my properties.  Eventually, I found real estate syndications and became a full time passive investor.  Now, I hire experienced asset managers to buy, manage and eventually sell the assets.  My job is to thoroughly vet the operator, analyze the market and analyze the deal - then I send the wire and my job is done.  You lose all of the control and these are long term investments - but in my experience the returns match what I had on the active real estate and I am hiring professionals to manage the assets.  These are people whose full time job is to effectively manage the assets on behalf of the investors.  Another benefit is it is much easier to diversify into multiple markets, asset classes and operators.

    Just wanted to share an alternative - often active investing is the way to go, but it really depends on the person and it is important to know that there are passive ways to accomplish your financial goals.

    Good luck!

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    House hack! Wherever you'd like to live. Buy a 4 unit

    0Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Hey Jadan, have you looked into Ohio markets such as Columbus? A lot of investors based in markets like California and New York are choosing to purchase their investments OOS in the Midwest because of the affordability and numbers making more sense.

    Prices in Columbus are still low enough to find 1% rule deals and there's a ton of appreciation happening in this market as well. I actually moved from Florida to Columbus for the real estate. I saw how fast the city was growing and decided to make the jump.

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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1y

    First piece of advice....don't come here and tell people you have $200k to invest.

    Second piece of advice, understand what you want before you look. Once you know what you want, you then know how to look. If you're indecisive right now, get some conviction. Once you have conviction, work on your discipline. When you have both, it's very hard to quit and when you find it hard to quit-- it's likely you won't fail. 

    Third piece of advice, it's too general for me to say Ohio sucks. But go back to my first piece of advice and see where all the predators will circle.  And do the math. House hacking is a farce for many reasons, also. 


    Fourth piece of advice...don't believe people's advice that have something to sell you without fully verifying & doing your diligence.

    Really dig in on #2 before you do anything. 

    3Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    1y
    Quote from @V.G Jason:

    First piece of advice....don't come here and tell people you have $200k to invest.

    Second piece of advice, understand what you want before you look. Once you know what you want, you then know how to look. If you're indecisive right now, get some conviction. Once you have conviction, work on your discipline. When you have both, it's very hard to quit and when you find it hard to quit-- it's likely you won't fail. 

    Third piece of advice, it's too general for me to say Ohio sucks. But go back to my first piece of advice and see where all the predators will circle.  And do the math. House hacking is a farce for many reasons, also. 


    Fourth piece of advice...don't believe people's advice that have something to sell you without fully verifying & doing your diligence.

    Really dig in on #2 before you do anything. 


     👆 

    [email protected]859-443-4952
    Sam McCormack Realtor
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  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    Hey Jadan,

    Here are some high level thoughts:

    1. You are correct that putting 3.5% down on a fourplex likely won't cash flow after one year. If that were true, then an investor putting 20% down would snatch it up. 

    2. You need to think about your skillsets, time, and capital. For example, I saw a good deal that needed work. I had the skillsets, time, but I didn't have the capital so I passed on it. 

    3. Everyone will have a different opinion on this but personally I'm not a fan of new construction. Converting a garage into an ADU, sure. But to buy land just to add more units, for me is a pass. For that same capital, I can buy a run down project and renovate. It is faster and easier to finance.

    4. Scale up, don't just hit the ground running. If you have never done a project, let alone over state lines, then I probably wouldn't recommend it. Start with one that might need some clean up and go from there. As you get more familiar and develop best practices, you can then go to new construction.

    I hope this helps.

    0Reply
  • Robert Pickett
    Rental Property Investor · Los Angeles · Member since 2024 · 8 posts · 7 votes
    1y

    I am in CA too and it is a dead end situation with prices and very little prtection for landlords.  I am exiting the rental market here (love living here tho). Strongly suggest scoping out GA, TN, OK, PA, AL, IN, etc.  Lots of info out there.  Look for Facebook groups too.  Good luck. 

    1Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1y
    Quote from @Robert Pickett:

    I am in CA too and it is a dead end situation with prices and very little prtection for landlords.  I am exiting the rental market here (love living here tho). Strongly suggest scoping out GA, TN, OK, PA, AL, IN, etc.  Lots of info out there.  Look for Facebook groups too.  Good luck. 

    Hi Robert, I would look into Columbus Ohio as well. Still tons of positive cash flowing deals that meet the 1% rule and amazing appreciation here! Plus the macroeconomics are on fire with job growth, population growth, and companies moving/developing here. For example, Intel headquarters, Amazon, FB, Google, Honda, Anduril, etc! So much stuff going on here!

    [email protected]614-300-7535
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    0Reply
  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    If you are selling your house here where are you going to live? If you are thinking of renting, then that wouldn't make sense. Why have an appreciating asset out of state go right into the landlord's pocket here?

    You are correct, buying a four plex is tricky here putting 3.5% down. I tell everyone that if the numbers worked putting 3.5% down, why wouldn't investors pick it up putting 20% down?

    What I would consider as a strategy here is buying a house with an ADU. You could build one but it is better in most cases to buy one already existing. Then you can house hack the rest of the it and then consider moving out later on. Or stay depending on your situation.

    1Reply
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