Buy and hold in the High Desert Area CA

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Buy and hold in the High Desert Area CA

Tri Tran
Investor · Fountain Valley, CA · Member since 2013 · 13 posts · 8 votes

Hi Everybody,

My name is Tri (tree) and I'm fairly new to real estate business. I'm a working professional and have enough money for a down payment for my first house. I was thinking about investing in the high desert area (specifically Hesperia area) of CA as a buy and hold/rent property. I wanted to know what everybody’s general thoughts and opinions are about investing in this location? Will it be easy to find tenants? Or to sell the house quickly in a couple of years if needed? Basically, is this a good location overall for buying rental properties?

I used to work and live in the area (Victorville) and I could see first hand the growth that the whole area is undergoing. I thought about investing closer to home in the LA/OC area but like many others have said, the cash flow just isn't there.

Some feedback would be great! Excited to get to know most of you on this board as time goes on!

Thanks in advance

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Steve L.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y

Tri -

Welcome to BP.

I own houses in Hesperia and surrounding areas. Most of our initial rentals were purchased in Fontana, Rialto, San Bernardino and we expanded to that area in 2010.

We decided to buy there for the following reasons:

1. There is a large supply of 1980+ built houses for a reasonable price compared to rent.

2. It is within 45 miles of my house.

3. Historically the area has had had massive price increases/decreases. You can buy now well under replacement cost.

4. Growth is pretty good right now. Walmarts, Targets, etc.

The negatives:

1. Commuter town. Not a lot of local jobs.

2. The weather is severe. Hot summers, freezing winters, always windy.

3. Much of the economy is subsidized living (disability, retirement, fixed income, etc).

4. The wholesale cost to buy a house there has doubled since 2010. (I'm not complaining about this, but it's tougher to buy now).

The tenant quality is a different caliber than Orange County or LA. Houses rent slower, you have to look for different criteria. Location is extremely important to tenants.

Without knowing your situation I cannot provide much other advise. Feel free to PM me if you want more questions answered.

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  • Steve L.
    Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    12y

    Tri -

    Welcome to BP.

    I own houses in Hesperia and surrounding areas. Most of our initial rentals were purchased in Fontana, Rialto, San Bernardino and we expanded to that area in 2010.

    We decided to buy there for the following reasons:

    1. There is a large supply of 1980+ built houses for a reasonable price compared to rent.

    2. It is within 45 miles of my house.

    3. Historically the area has had had massive price increases/decreases. You can buy now well under replacement cost.

    4. Growth is pretty good right now. Walmarts, Targets, etc.

    The negatives:

    1. Commuter town. Not a lot of local jobs.

    2. The weather is severe. Hot summers, freezing winters, always windy.

    3. Much of the economy is subsidized living (disability, retirement, fixed income, etc).

    4. The wholesale cost to buy a house there has doubled since 2010. (I'm not complaining about this, but it's tougher to buy now).

    The tenant quality is a different caliber than Orange County or LA. Houses rent slower, you have to look for different criteria. Location is extremely important to tenants.

    Without knowing your situation I cannot provide much other advise. Feel free to PM me if you want more questions answered.

    2Reply
  • Jeffrey Almonte
    Rental Property Investor · Los Angeles, CA · Member since 2011 · 122 posts · 67 votes
    12y

    Steve, how would your criteria differ from a rental house in OC or LA?

    0Reply
  • Steve L.
    Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    12y

    We don't check credit for 90% of our applicants.

    My criteria is very strongly based on income, rental history and eviction/criminal history.

    When I started I used to always run credit, but most of the applicants have sub-600 scores and the same stories.

    0Reply
  • Jeffrey Almonte
    Rental Property Investor · Los Angeles, CA · Member since 2011 · 122 posts · 67 votes
    12y

    Thanks for the quick response Steve!

    0Reply
  • Jason Schaefer
    Real Estate Investor · Chino Hills, CA · Member since 2012 · 13 posts · 4 votes
    12y

    Hi @Tri Tran ,

    Welcome to BiggerPockets. You came to the right place to learn about real estate. Everyone on here is really helpful and very resourceful. Make sure you listen to the podcasts and take notes.

    I was looking very heavily in the high desert about three months ago but couldn't find any properties that would meet the 1% rule. If I'm going to buy I'd like to see 1.4% or higher which is really tough in Southern California right now. I did end up finding a great investor friendly real estate agent up there who I'd recommend if you do end up buying up there. The agent has a spreadsheet that breaks down the income, expenses (with vacancy) and a cash flow number at the bottom. The agent and I came to the conclusion the area has dried up as there are a lot of investors out there now.

    Hope this helps and let me know if you have any questions.

    Best of luck

    Jason

    0Reply
  • Jeff Greenberg
    Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
    12y

    Welcome to BP from a fellow Californian

    0Reply
  • Fernan Nava
    Rental Property Investor · Barstow, CA · Member since 2015 · 131 posts · 102 votes
    6y

    Hello Jason, m an investor in the high deser area as well. I want to offer myself as a referral to you agent, sounds like the type of agent, I would like to work with feel free to share my number with ir agent. 7147670887 my name is Nando. Thanks .

    0Reply
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