Southern California investors, please advise.

Tustin, CA · Member since 2017 · 57 posts · 14 votes

I'm ready to make a purchase and prefer to keep it close to home in southern California. Keeping in mind the cities where prices are high, the demographics undesirable, or new businesses or homes being built etc., what areas are worth (or not worth) an investment property? Around 600K 4,3, or 2 unit properties only Investment property (live in one unit, rent others out) I'd prefer 3.5% FHA to free up more cash for a second investment property in 6 to 12 months. I'm particularly wondering about San Bernardino, High Desert area, Riverside, N. San Diego, Palm Springs area. But i'm open to any place in So Cal.

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Brendon Woirhaye

Rental Property Investor · Whittier, CA · Member since 2014 · 325 posts · 268 votes

That question is a bit too broad. As a Southern California investor, keep in mind that properties are expensive in most areas that are desirable - you aren't likely to find the opportunities for properties that meet those "1% rule" or "2% rule" that you'll hear investors in some other states talking about.

My personal preference would be to find a nearby property to start learning the ropes with before you go for something more distant, and that would help you draw a circle around your home to allow you to start digging into neighborhoods and getting a feel for prices. Use zillow or redfin to "browse" recent sales or for sale properties to also give you a better idea about sale prices, or zillow/apartments.com/zumper/etc to get an idea of prevailing rents in those areas.

Try to find a local landlord / apartment owner / real estate investor club where you can talk with others about where they are investing in the local area.

Find an agent experienced in working with small property investors.

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Brendon Woirhaye
Rental Property Investor · Whittier, CA · Member since 2014 · 325 posts · 268 votes
8y
That question is a bit too broad. As a Southern California investor, keep in mind that properties are expensive in most areas that are desirable - you aren't likely to find the opportunities for properties that meet those "1% rule" or "2% rule" that you'll hear investors in some other states talking about.
My personal preference would be to find a nearby property to start learning the ropes with before you go for something more distant, and that would help you draw a circle around your home to allow you to start digging into neighborhoods and getting a feel for prices. Use zillow or redfin to "browse" recent sales or for sale properties to also give you a better idea about sale prices, or zillow/apartments.com/zumper/etc to get an idea of prevailing rents in those areas.
Try to find a local landlord / apartment owner / real estate investor club where you can talk with others about where they are investing in the local area.
Find an agent experienced in working with small property investors.
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Nabil SuleimanBusiness Member
Real Estate Agent · Los Angeles, CA · Member since 2016 · 596 posts · 299 votes
8y
@Jacob Prelle
I agree with Brendon.
Consider what you do for work, and how far you would be driving to get to those locations. if you are working in LA, driving from Palm Desert daily could allow you to cash flow, but your quality of life can be destroyed. So do consider that if you are planning to live in the unit that you are taking into account all other aspects of how the location you choose affects your life.
Also, take into account the amended rules AB 2299 and SB 1069, and explore the opportunities they could provide you in the neighborhoods you are concentrating on.
Feel free to reach out if you need to brainstorm.
Good Luck
[email protected]661-904-1725
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Bryan ZuetelPro Member
Attorney · Orange County, CA · Member since 2017 · 242 posts · 99 votes
8y
Be aware that if you want to do FHA, you'll have to occupy one of the units. I would look into the area around Chapman University for a 2-4 unit property, given all the growth and revitalization around the university. You might be able to break even or close to it.
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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
8y
What are you looking for specifically with an investment property? Are you wanting cash flow? What are your goals?
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Kevin FoxPro Member
Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
8y
Hey @Jacob Prelle
If you are willing to make the move South, San Diego is hard to beat.
Incredible place to live and even better to invest.
Feel free to reach out if you’re interested!
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Nicole Candelario
Cherry Valley, CA · Member since 2016 · 30 posts · 11 votes
8y
Hi @Jacob Prelle....I came accross your post and thought I'd respond. We did the very same thing you are looking to do. It's totally possible to buy a small multi family and live in one and rent out the other units. With that price range you are absolutely correct in choosing the Riverside, San Bernardino counties. We used a program with zero down payment, no PMI, low interest, no points or origination fees, they paid seller AND buyer closing costs. There are several guidelines to purchase like living in one of the units but you already know FHA is the same. The process takes a little while but in my opinion and experience it's completely worth it! I am a real estate agent in the Inland Empire and would LOVE to help you find your first "house hack" deal! We bought a one acre property in Cherry Valley for $740k. After our tenants pay their rent, our portion of the mortgage is only $325/mo!
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Vinci S.
Investor · Riverside, CA · Member since 2017 · 52 posts · 22 votes
8y
@Nicole Candelario I'm curious about your type of setup. What kind of program is this?
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Nicole Candelario
Cherry Valley, CA · Member since 2016 · 30 posts · 11 votes
8y
@Vinci S. the program we used is called NACA. You can go to naca.com to find info. Honestly we fell into it....a blessing! It was our first purchase and income property. It took awhile for it to be finished but it was completely worth it! Let me know what you think.
Nicole
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