Is there really no properties that cash flow in CA?

Question

looking for properties that cash flow in CA, more specifically in bay area. Seems like alot of out of state investors say there is no cash flow here but I beg to differ. I know I can find houses that need some work but help me understand why the properties dont cash flow. im looking to get into some brrrr properties I need to get better at analyzing deals for sure, im not an expert but just a beginner.

Do we have any bay area investors here, someone who would like to connect with me more ?

Bradley Buxton · Answer

@Nathan P Tanner

Many claim a property doesn’t cash flow because they’re only putting 5–20% down. But if you buy all cash, most deals will cash flow after taxes and maintenance, etc. There is a huge advantage to using leverage to buy real estate.

There’s no magic formula—despite what books, podcasts, or gurus selling “$5K to 100 doors” plans might say. Like the gold rush, the easy wins are gone. Now, many are just selling the map. It takes creativity, guile, and diligence to find a deal that works for you, your goals, time, skills, and energy.

That said, there are still deals in California. It’s not easy due to the high cost of entry, but people still want to live there. If you have capital and invest thoughtfully, there are still solid opportunities. Repetition and action matter more than hype. Do the math, network, and take thoughtful action.

Scott Scoville · Answer

Hey Nathan, cash flow is a challenge in CA, especially in the SFH space, however, if you look at small multi family properties you can still obtain cash flow. Also, consider renting by the room, sober living, MTR's, etc. You can also find seller or creative finance to get better cash flowing properties. I invest in Sacramento. I buy in good locations, hold long term, and ride the incremental price and rent appreciation. CA real estate is not going anywhere despite some naysayers. Be happy to chat about this market anytime. Best of luck.

Alan F. · Answer

Anyone can eventually cash flow, but it comes at an initial cost. I.E. you'll have to make an investment of $ & time.

Basics; Live like a pauper, lowest possible DTI, highest possible FICO. No car payments, no cc debt, highest possible income. Be a miser with $. Don't eat out, give hand made gifts, get side work, learn home improvement skills.

1st investment; buy a househack, find the ugliest house/duplex etc. That will qualify for lowest % financing. FHA guidelines will tell you what is "livable". Fix up the house as cheap (not bad) as possible while your tenants off set your mortgage.

Taxes; get a CPA or learn how to take full advantage of taxes, I.E. salt deductions etc.

Stabilize that primary over time, keep learning about EVERYTHING, tenant management, value add, taxes etc.

Pull a moderate amount of equity in cash, rinse & repeat.

Have $ saved for when things go wrong, because they will.

Keep climbing the ladder in your career, if you get $ matching in your 401k then match. Keep your medical insurance.

For Tennant management check out; California apartment association

For contractors check out, CSLB website

Read real estate books, forget social media. Stay on this forum and engage.

Becca F. · Answer

Great points. All of the above and attend local meet ups. OP, if you look on MeetUp, Tyler Jahnke runs some meet ups in Oakland every month or so. They had one time where the attendees walked a newly constructed ADU. There are other meetups in S.F. and San Jose.

You can talk to local investors and maybe some of them might let you walk their projects so you can see a BRRRR or flip (even if you don't flip) goes.

Nathan P Tanner · Answer

Hi Scott I would love to connect. You said SLE and thats one thing I do have, I have contracts with SLE homes and the renter will not be a problem. My problem has been finding the right property. If you want to respond in a direct message we can talk more.

Thanks for your help .

Nathan P Tanner · Answer

Thank you Brad,

I really do appreciate the input you have given me here. I agree with you and had some of these thoughts in my mind already but your words give more confidence to what im thinking.

With the brrrr method you are technically paying cash up front but with hard money of some sort right?  you're saying if you put down 20% it does cash flow.  So after I refi and pull out hard money pay back plus interest the deal should cash flow because id be leaving 20-30 percent in the deal ?

Your words mean more then money to me.

Thanks again Brad

Becca F. · Answer

I'm in the Bay Area and I'm cash flowing but I didn't buy in this market but before 2013. I also invest out of state ( I comment a lot more about that).

I've seen a few homes where the investor paid cash (around $600k) for distressed property, did a BRRRR and rented it out. So technically this investor is cash flowing but locked a lot of money without using leverage. I went to an open house in the East Bay and the agent told me about this investor's strategy. I think some of it could be wealthy people trying to park their money somewhere.

I do know a few people who are get a net positive monthly income who are doing rent by the room in San Jose (he bought in 2021 and had industry knowledge as an agent too), and a few people who did BRRRRs, house hacked by living in primary residence and renting out the ADU with midterm rental or STR, or the converse, live in the ADU and rent out the main house, bought from 2022-2024, both in San Francisco. The S.F. investors took out loans, can't imagine paying cash for $1+million house.

Are you finding properties in the Bay Area or NorCal that makes financial sense? I did investigate Sacramento but didn't drive up there and seriously look at making offers - trying to problem my OOS properties before I buy anything else.

Karen Margrave · Answer

Of course! There are so many strategies. In CA due to the lack of rental homes, many people are doing shared living, which raises ROI higher than renting out entire house. You need to know the market where you are investing in order to understand what makes sense. Is there a tight supply of rental units? Are rents high? What is the inventory of homes for sale? Is there getting to be a glut on the top end? Are prices dropping? There is a lot that goes into determining what is happening right now in the market. It's one of the most challenging I have seen in decades. There are good deals, but you have to know your local market, and understand what is driving it.

Scott Scoville · Answer

@Nathan P Tanner just DM'd you. Looking forward to connecting.

Is there really no properties that cash flow in CA?

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