All Forum Posts by: David Eiges

I'm a new investor from Pasadena looking to invest in Southern California (right now I have my eye on Los Angeles and Riverside).  To get started, I see myself getting my feet wet with self-managing small multi-families with the possibility of living in one of the units.  At this point, I could afford a conventional loan on a single property.

From everything I hear (podcats, books), full-time investors are doing most of their deals off-market.  However, for a newbie, how should I get started?  In my mind, there are two big barriers to doing off-market:

1) At low volume, there isn't justification for me to do my own marketing.  Nor would I be able to pay all-cash.

2) Lack of ability to pay all-cash on a property would prevent me from purchasing from a wholesaler.

So, does this mean that in order to get started I should be working with an agent going through MLS or as a first-time purchase is it feasible to still work with a wholesaler to get an off-market deal. Would that require utilizing a hard money lender?

I'll caveat all of this by saying that I am well aware that it is a seller's market, and Idon't plan on buying while prices are high.  Some great data sources I used were redfin's data center blog, google's public population estimates for cities, and talking with other investors.  I'm trying to do my research so that when there is opportunity I'm ready to go.

Jama, I think I'm in a very similar boat as you as I'm in Pasadena, haven't bought anything yet, and evaluating different strategies to enter the market.  First and foremost, my understanding is that the overall real estate market is expensive right now.  I've been listening to the bigger pockets podcasts every day and many of their interviewees got their starts in the 2008-2012 time frame, so that seemed like a golden opportunity.  I think this is also reflected in the general economy/stock/real estate prices.  Some real estate in Los Angeles is returning to 2006 prices so to me, that's an indicator that prices are high.  Because of that I'm trying to do as much information gathering as possible and peruse for opportunities, but at the same time I don't feel particularly rushed because I don't think that it's a prime buyer's market right now and I want to make sure that when I do buy a property it will be at a price/income point that will give me a headstart on parlaying that first investment into additional properties.  Anyways, as I've been exploring there are definitely better monthly rent/price ratios 1-2 hours outside of LA (riverside, Bakersfield, etc.) for cash flow.  Probably around 1% in Riverside and 1.5% in Bakersfield for some multi-family units.  I was thinking a lot about investing out-of-state but I'd rather be able to get to my property easily, at least to start.

You're going to get better appreciation in the LA market but at the expense of cash flow.  In my case, I think I'd rather have cash flow  to start as it would help me get the next property after my first.  That being said, I think more wealth can be gained in the long-run from the appreciation...I think that for myself, my best strategy would not be to wait for appreciation growth but instead to seek cash-flow somewhere that I can drive to.