Is there really no properties that cash flow in CA?
Nathan P TannerPro Member
New to Real Estate · Bay Area California · Member since 2022 · 34 posts · 16 votesIs there really no properties that cash flow in CA?
Most Popular Reply
Bradley BuxtonBusiness Member
Real Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votesMany 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.
13 Replies
- 1yBradley BuxtonBusiness MemberReal Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votes
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.
- New to Real Estate · Bay Area California · Member since 2022 · 34 posts · 16 votes1y
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
- 1yBradley BuxtonBusiness MemberReal Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votesYou have to look at the numbers. Most properties in areas with strong rental metrics will not cash flow at 20% down. Here in the Reno, NV market most are at 30% down. That said there are probably deals that will work at 20%, the lending costs at 25% down are lower which is something to consider.
Quote from @Nathan P Tanner:
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
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes1y
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.
- New to Real Estate · Bay Area California · Member since 2022 · 34 posts · 16 votes1y
Thanks for the reply, I appreciate the help so much. all those questions make sense to me, the cool part is I had been looking for my first home in the past year and haven't stopped dissecting the market since and watching things unfold in the past year. I do need to spend more time on specifics like you stated above.
-Are prices dropping? = Yes
-Tight rental supply? = Need to look into this
-Are rents high? = Not as high as covid
-inventory of homes for sale? = Need to look into this
Hearing you say this is the most challenging time to determine what is going on in the market, makes me happy to know im learning now at one of the hardest points. To me it just makes me think after I get threw these times and learn, it's only going to get easier.
Something I need to get better at is analyzing deals and finding more deals that make sense I think my next post is going to be about wholesalers and how to find off market deals. some homework I have is figuring more specific questions about what and why the market is doing what its doing. Karen thank you for your advice I would love to stay connected.
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes1y
Quote from @Nathan P Tanner:
Thanks for the reply, I appreciate the help so much. all those questions make sense to me, the cool part is I had been looking for my first home in the past year and haven't stopped dissecting the market since and watching things unfold in the past year. I do need to spend more time on specifics like you stated above.
-Are prices dropping? = Yes
-Tight rental supply? = Need to look into this
-Are rents high? = Not as high as covid
-inventory of homes for sale? = Need to look into this
Hearing you say this is the most challenging time to determine what is going on in the market, makes me happy to know im learning now at one of the hardest points. To me it just makes me think after I get threw these times and learn, it's only going to get easier.
Something I need to get better at is analyzing deals and finding more deals that make sense I think my next post is going to be about wholesalers and how to find off market deals. some homework I have is figuring more specific questions about what and why the market is doing what its doing. Karen thank you for your advice I would love to stay connected.
For someone new getting into the market, it's intimidating. Go to meetups in your local area if there are any. We used to build spec projects, but the past few years with pricing, etc. it hasn't made sene. I think materials costs are where they are, and are going to remain here, so it's our new reality. Lot costs are high, and you really have to dig to find anything that makes sense for new construction. Our market here in Redding, CA is extremely demanding, as we've had a huge influx of people from other areas for a few different reasons. Our rents are high, (not compared to the bay area, but to our old normal) And homes that are priced at market are still selling (that's why it's important to know the market or have others that do, are prices dropping because of the economy or were they overpriced to begin with? Only experience gives you that perspective)
My son and I were up looking in an area about 30 minutes out of Redding, where there are some subdivision lots cheap, and houses go for enough it may be a good opportunity. We may do some spec homes there.
There's many ways to participate in real estate investing. There's people that find the deals, finance the deal, do the work, etc. There's also so many niches and different strategies. I've been on BP since 2009. I remember years ago watching the market and telling Brandon that I could see vacation rentals were becoming a thing, an we needed to start a forum! Here we are, and it became a HUGE thing! LOL
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes1yWe used to build spec new construction in Redding, Orange County, and Bend, OR. Unfortunately Covid put an end to that, and things changed in the marketplace. However; in Redding, rents are still high, inventory is tight on homes under 450k. We also have had a big influx of buyers coming up wanting to retire in our area, as we are the crown jewel of northern California. Mountains, rivers, lakes, miles of trails, etc. Though building new doesn't work in the more populated areas, there are still some deals on land in the outlying areas, where 2nd homes, STR are purchased, etc. so we may do a few of them.
Quote from @Nathan P Tanner:
Thanks for the reply, I appreciate the help so much. all those questions make sense to me, the cool part is I had been looking for my first home in the past year and haven't stopped dissecting the market since and watching things unfold in the past year. I do need to spend more time on specifics like you stated above.
-Are prices dropping? = Yes
-Tight rental supply? = Need to look into this
-Are rents high? = Not as high as covid
-inventory of homes for sale? = Need to look into this
Hearing you say this is the most challenging time to determine what is going on in the market, makes me happy to know im learning now at one of the hardest points. To me it just makes me think after I get threw these times and learn, it's only going to get easier.
Something I need to get better at is analyzing deals and finding more deals that make sense I think my next post is going to be about wholesalers and how to find off market deals. some homework I have is figuring more specific questions about what and why the market is doing what its doing. Karen thank you for your advice I would love to stay connected.
Another option is investing in homes in the more established areas that have large lots, and adding an ADU, or doing some type of value add.
I have a property in Anderson listed that has potential for creating more space, etc. It's on 2.5 acres and has a HUGE garage/shop. Half could be converted to more living space, and still have a 3 car garage, plus views.
Sometimes you just have to think outside the box! If you're interested in discussing the market here, give me a call, or text. I have years of experience as Realtor, builder, developer, on everything from SFR, office/retail condos, small office parks, subdivision, etc.
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes1y
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.
- Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes1y
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.
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes1y
Quote from @Alan F.:
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.
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.
- 1yScott ScovilleBusiness MemberReal Estate Agent · Sacramento, CA · Member since 2019 · 497 posts · 272 votes
Quote from @Nathan P Tanner:
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 ?
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.
- New to Real Estate · Bay Area California · Member since 2022 · 34 posts · 16 votes1y
Quote from @Scott Scoville:
Quote from @Nathan P Tanner:
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 beginn
Do we have any bay area investors here, someone who would like to connect with me more ?
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.
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 .
- 1yScott ScovilleBusiness MemberReal Estate Agent · Sacramento, CA · Member since 2019 · 497 posts · 272 votes
Quote from @Nathan P Tanner:
Quote from @Scott Scoville:
Quote from @Nathan P Tanner:
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 beginn
Do we have any bay area investors here, someone who would like to connect with me more ?
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.
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 just DM'd you. Looking forward to connecting.
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