Looking for Ventura County, CA advice on my plan

7 Replies

Hey guys,

My name is Nitit Chartuprayoon. I've been renting in Camarillo for almost 4 years now, and I work at the naval base. I am a first time home buyer. I know that interest rates are low because the house prices are high, and it's vice versa. I have a budget of around 575k, and I have 10% down. My credit is in the 800. I qualified for a conventional loan. Since interest rates is at an all time low, I dabbled in the idea of buying a SFR to live in, rent out the other rooms, and eventually keep it long term as a rental property due to low interest rates. I have mostly been looking at Moorpark and Simi Valley area, and originally ruled out Oxnard because of school district. Camarillo, Thousand Oaks, and Newbury Park SFR tend to be out of my price range. I haven't look too much into Ventura since I thought Moorpark and Simi Valley would be more attractive since they're a bit closer to San Fernando Valley and LA. However, I'm finding it pretty hard to get my offer accepted since it's a huge seller's market, and there is an inventory shortage at the moment.

My question is what other areas should I look into? I know Santa Paula is developing more and more with new homes being built, but it seems to be just based on potential. I know that Oxnard has pocket of areas that are good, but the school district isn't highly rated and that would have an effect on the appreciation of the property. Also, I've heard both sides and read a bit on whether to buy now or wait for the dust to settle with COVID. I thought about buying now as eventually turn the property into rental property because the interest rates are so low at the moment. Would that be a good idea? I know if the price drop, then the interest rates will go up and I will, more or less, have the same monthly payment, but will gain more equity. Nobody really knows for sure how big of the drop in price will be or how much foreclosure will happen. I didn't want to try to time the market, but I'm also not in a big rush to buy a home. I also don't mind buying a fixer upper in a better area with low crimes, and good school district since it's easier to fix a house than make an area better. Should I keep looking around, and also expand my search area? Or should I wait until after COVID ends to see what is going to happen?

I am just starting out and doing my research, but the strategy I was going with is house hacking a SFR to buy and hold to eventually convert to rental property with the low interest rate. If anyone has done this, then I would love to get more information on it from someone with experience. I read since you bought the home for primary residence, then there would be some complications to convert it to full rental, but there is a way.

Thank you for your time!

Tenants seem to care much less about school district than I ever thought they would, so I wouldn't weigh too heavily on that I'd focus more on a good home in a good area.  Nobody that is renting a room from you is going to have kids (hopefully) and when you move out and convert to a full rental it won't matter as much because all your competition will be in the same school district, and like I said it seems to be less of a factor than you might think.

@Aaron K. Thank you for information. I didn't think of it like that. My parents just keep telling me that location is the most important factor, but it seems that may not always be the case. I'll expand my search area, and to hopefully find a good deal on a house. That might be hard in this crazy seller's market, but I'll have to be patient.

@Nitit Chartuprayoon

Location is the most important aspect when it comes to real estate investing, you can change the house but you can't change its location. when it comes to deciding what qualities to focus on, start with thinking about the demographics of the tenants that you plan on renting to, do you plan on renting to families or do you plan on renting to college students, military members, and so on? Once you've determined what demographic you plan on renting to, think about what that particular demographic looks for in housing and go from there. Once you've picked which location and potential properties work for you. Your going to want to find a below market value deal, most likely this will be an off-market fixer, you probably won't be able to buy something on the MLS and it still is a good deal, the real estate market is just too crazy right now. Also, because it is a fixer, and gaining equity through fixing it up will help insulate you in the event the market drops. Also, make sure you really have the numbers right and have a good margin of safety, most investors miss a lot of not so obvious costs in their calculations that eat away at there returns. Best of luck in finding a property to invest in. Real estate is the best investment out there.

@Nitit Chartuprayoon

You said that you worked at a naval base. I don't know if you're actually in the military but have you looked into getting one of the VA loans? The terms on those loans are usually really good. And I'd have to agree that a good house in a good location like others have said is very important. You can change the house but you can't change the area. I wouldn't worry so much about schools because if the parents really wanted a good school they would send their kids to a private school anyway.

@Jay Dimacali

Unfortunately, I'm a civil servant and not active duty. It'd be nice to be able to get VA loans. Good location could be good neighborhoods in an ok city, and not strictly just the city in general? Or are you talking about the whole city in general?

@Nitit Chartuprayoon

I try to go for the worse house in the best area I can get. If the city is good overall that's even better. If the city is an upward trend in improvement then you'll probably be okay in the long run. Biggest factor is that the numbers have to make sense the moment you close escrow.