People Advise me to start in my area but I live in LA

7 Replies

Hello people left and right tell me to start REI in my own community but I live in LA where there is gang activity almost anywhere. Even if there's no gang activity the prices are too high? Should I try another state or county or should I keep trying to find a deal in my area

Hi @Cirilo Villar -

There's no right or wrong answer to this - it's personal.  For many, there's a comfort in sticking to the neighborhoods and streets that they are familiar with ... the idea of being able to drive by their property at any time of day gives them peace-of-mind ... the drawback to that, as you're experiencing, is that many local markets don't provide the returns or the number of opportunities that you're looking for.

With how easy it's become to research different markets and connect with locals in each of those areas, the challenges that investors faced 10 or 15 years ago when considering going out-of-state just don't exist anymore (assuming you're willing to put in the work to do that research and make those connections).

For me, personally, I try to be opportunistic ... I watch my local market and I watch a number of out of state markets - whichever one presents an attractive opportunity first is the one that I make a run at - if I don't get it, no big deal - I wait for the next one.

My recommendation would be for you to start by deciding how much money you're willing to invest and what type of returns you're wanting to achieve.  Once you have that, look to see if you can find those types of deals in your local market.  If you can, great - consider investing locally.  If you can't, well, you've got three choices: 1) do nothing and keep your money on the sidelines, 2) change your expectations or 3) find a different market.  My choice would be #3.

Wish you all the best!

@Brian Sparr since I’m wholesaling I’m willing to spend 5,000 but that’s not very obtainable when wholesaling property in California especially in Los Angeles I’ve thought very frequently to tap into other markets and maybe even take a two day trip to see the property personally and meet the seller to pitch

I am also from the LA Area. My husband and I have recently decided to invest out of state instead of buying our first home out here. We are barely priced out of this market and have been researching out of state investing for a bit now. I got my recent agent info through a realtor friend of mine from here. Try referrals if you are weary about OOS Agents or others. If you don't personally know a Realtor here in LA talk to some of your friends or family who have recently bought a house. They might be able to recommend you to a great realtor who might have a referral in a market you are interested in. If out of state feels like the better path, research and identify the market you want to start in first and then look for a realtor out there. Another idea is to go on Zillow, Redfin, Yelp, etc. and find an Agent with great reviews. 

Another option if you want to stay close to home is to partner with someone. Attend local Real Estate Meet Ups, network with other investors and see if you can find anyone that might want to partner with you. Pool your resources together and do a fix n flip or buy and hold.

Since you are already wholesaling in your area, try to save more capital doing that. Ramp up your wholesaling business and save enough to get you in the market you wish to be in. In essence there are many avenues you can go, but research them all and see what fits your ideal path.

I would read Long Distance Real Estate Investing by David Green as well as Brandon Turner's book on No and Low money down real estate investing. 

Good Luck on your journey no matter what you decide on.

Originally posted by @Cirilo Villar :

Hello people left and right tell me to start REI in my own community but I live in LA where there is gang activity almost anywhere. Even if there's no gang activity the prices are too high? Should I try another state or county or should I keep trying to find a deal in my area

 Many investors from CA invest inward into the Midwest. Prices here are LOW but rent keeps going up. Almost every property you find in the Cleveland area hits the 1% rule! 

Originally posted by @Cirilo Villar :

@Brian Sparr since I’m wholesaling I’m willing to spend 5,000 but that’s not very obtainable when wholesaling property in California especially in Los Angeles I’ve thought very frequently to tap into other markets and maybe even take a two day trip to see the property personally and meet the seller to pitch

 Stay local bruh.  Wholesaling in another market doesn't make sense for you. 1st thing to note is that all wholesaling is, is brokering real estate in an inefficient & often illegal manner. So with that in mind I recommend you get licensed & broker real estate that way. As for where to broker real estate do this in your back yard. Markets don't make you a good or bad broker. Your sales skills, marketing skills & market knowledge do. So naturally the market you are most familiar with will give you the best chance at success.

you recommend I become a realtor?
wholesaling is illegal in certain states though Is it not?

Originally posted by @James Wise :
Originally posted by @Cirilo Villar:

@Brian Sparr since I’m wholesaling I’m willing to spend 5,000 but that’s not very obtainable when wholesaling property in California especially in Los Angeles I’ve thought very frequently to tap into other markets and maybe even take a two day trip to see the property personally and meet the seller to pitch

 Stay local bruh.  Wholesaling in another market doesn't make sense for you. 1st thing to note is that all wholesaling is, is brokering real estate in an inefficient & often illegal manner. So with that in mind I recommend you get licensed & broker real estate that way. As for where to broker real estate do this in your back yard. Markets don't make you a good or bad broker. Your sales skills, marketing skills & market knowledge do. So naturally the market you are most familiar with will give you the best chance at success.

Originally posted by @Cirilo Villar :
you recommend I become a realtor?
wholesaling is illegal in certain states though Is it not?

Originally posted by @James Wise:
Originally posted by @Cirilo Villar:

@Brian Sparr since I’m wholesaling I’m willing to spend 5,000 but that’s not very obtainable when wholesaling property in California especially in Los Angeles I’ve thought very frequently to tap into other markets and maybe even take a two day trip to see the property personally and meet the seller to pitch

 Stay local bruh.  Wholesaling in another market doesn't make sense for you. 1st thing to note is that all wholesaling is, is brokering real estate in an inefficient & often illegal manner. So with that in mind I recommend you get licensed & broker real estate that way. As for where to broker real estate do this in your back yard. Markets don't make you a good or bad broker. Your sales skills, marketing skills & market knowledge do. So naturally the market you are most familiar with will give you the best chance at success.

If you find a property buy it, close on it & resell it you don't need a license in any state. However what most folks are doing when they talk about wholesaling is brokering real estate. That is they find a motivated seller & assign their purchase agreement to an actual buyer. They make their money on the spread. I imagine that is your plan as you said earlier you've got $5,000 to put into this venture. Can't close on anything with $5,000 so I imagine the $5,000 is going to be your marketing budget. All that is, is brokering real estate. You need to be licensed in all 50 states to broker real estate.