All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

Originally posted by @Brandt Moore:

Hi everyone,

I recently left my 9-5 engineering job in July, and I finished my first flip shortly after that. I'm temporarily living in Missoula, MT for a couple months before moving to SoCal. At the moment I plan on continuing my engineering career once I move to California, but I'm not sure if I have the patience to hold off on REI until then.

I have enough in reserves for living expenses for awhile on top of the 40k I have to invest (I kind of lucked out on a successful first flip), so I'm wondering if anybody has any ideas of what I should pursue. It's difficult for me to get a conventional loan without an income source, and I don't have much of an investment history for a HML.

I'm interested in fix & flips, single-family & multi-family buy & holds, and just about anything that would make a profit. I was thinking about attempting to do a quick flip in Missoula while I'm here, but I think I would need cash in order to make the turnaround quick enough.

Any ideas, advice, or contacts would be greatly appreciated.

Thanks in advance!

Brandt,

Socal is an expensive market. I'd get another flip under your belt in Missoula so that you have more of a track record for HMLs when you get here. Perhaps you an HML local to you now can help with the additional cash you'd need for a faster flip (or maybe a family member?).

Lemme know what you get here!

Best,

Jon

1 Vote

Originally posted by @Joshua D baker:

I want to travel and house hack a apartment. What city should I be looking into?

If you don't want to go too far from home, I recommend Rogers, AR. Lovely place, lots of upside on the horizon!

1 Vote

Originally posted by @Gloria H.:

Greetings, BiggerPockets community! My name is Gloria and I am a registered nurse based in Los Angeles, California. Over the past years, I have worked as a staff nurse under hourly pay in different facilities while paying off nursing school then eventually graduate school. Now that I have my school loans paid off, (woo-hoo!) I want to move forward and pursue the next phase of my life as a homeowner! However, with recent events in my field and the uncertainties we have all faced with the recent pandemic, I came to discover that I want to create a safety net for myself and my family. I don’t want to risk my health and safety, or bring home risks for those I care about. Furthermore, I want to ensure that if I get ill and an unable to work, that I don’t face a sudden halt in income. Therefore, my goal is to reduce my living costs and househack a home in the area, with the plan to build my investment portfolio this way. I still love patient care and I have no plan to leave, but I believe we all deserve a brighter future! In the meantime, I enjoy meeting people of different industries, developing my knowledge in real estate and finance, and having positive enlightening conversations with people. I believe this is a great place for education and networking and am delighted to be here!

Thanks you!

Gloria

Hi Gloria!

Welcome to the dance! Congrats on paying off your loans, and a big round of applause for the work you do, especially in these difficult times.

Are you thinking about househacking a single-family home or a multifamily property?

Whereabouts in LA do you want to buy? Where's work for you?

I'm househacking a duplex south of Hollywood, which is centrally located because I work all over the place.

All the best,

Jon

0 Votes

Originally posted by @Rachel S.:

My preference is to purchase a multi family in Los Angeles within the next year or so. However, in case the numbers do not work out for me, I am looking in the IE also. I already have a SFH in the San Bernardino mountains that I rent out. This cash flows and has appreciated nicely, because I bought it as REO at a rock bottom price. I was looking at Redlands because of it's proximity to Loma Linda University, hospitals etc, due to the potential for a pool of professionals with steady incomes. I have read that the majority of it is nice but there is one neighborhood that should be avoided. The post didn't specify where that was. Can anyone enlighten me?

Also, if anyone has any other areas in IE that they think I should consider I would love to hear about them.

Rachel, where in Los Angeles are you looking? I've been impressed by some price points in South LA.

Best,

Jon

0 Votes

Originally posted by @Humberto Perez:

I’m active duty military and I just find out that I will be moving to Oceanside, CA. I want to weigh my options should I buy or rent? I plan to stay there for a Max of 3 years and then I would have to relocate. I could buy and hold but I know CA is very tenant friendly. My other option is to invest in my hometown Houston, Texas where I could get a rental property for a fraction of the price that I would pay in California. What do you guys recommend?

Humberto,

Oceanside vs. Houston -- interesting decision to make!

So, I don't know Houston too well, but I understand it's an energy-dependent market, right? Meaning booms in good times and relative busts in bad? I think this graph bears that out:

https://worldpopulationreview....

Notice the population shoots up, then stalls, shoots up, then stalls. Texas overall is a great state looking forward, so I don't think Houston is a bad market, but it's probably not as steady-Eddy as Austin or DFW. Still, your hometown knowledge will be super valuable.

I'm in LA, so I can speak to Oceanside with more knowledge.

I was recently digging deep into Orange County coastal listings, and the most affordable area is Oceanside. The thing about coastal real estate is that they're not making any more of it and it's only getting more expensive. If you can use a VA loan to leverage into a multifamily with enough rental income to keep your total cost low, I would say to do that in Oceanside. When you leave in three years, keep the property to enjoy the cashflow and, more importantly, the significant appreciation over the next decade.

Good luck!

Best,

Jon

0 Votes

@Andrew Barajas, maybe a lease with an option to buy? If he's that chill about the house and what he gets for it, maybe he'll go for something simple like that.

0 Votes

Originally posted by @Michael Pison:

Thank you too Jon, I am greatly considering house hacking. My parents are very close to paying off there mortgage and I see this as an opportunity to produce cashflow. I was thinking within the next few years while building my income/credit history my family and I will save up for a down payment on a duplex around the area to house hack. We would rent out both the old house and the second unit of the duplex and with a good deal, live for free and hopefully profit some. Is this a realistic idea to think of in LA? Am I thinking in the right direction? If you were in my shoes, what would you do? I would gladly appreciate responses from anyone.

Michael,

I like your thinking!

Have you or your parents looked into a home equity line of credit (HELOC)? It's a loan you can take against the equity you have in your home. If your parents have their home nearly paid off, you can use the equity in that home to buy the duplex. Are you familiar with this at all?

Best,

Jon

0 Votes

Originally posted by @Reyna Montoya:

Hello,

I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.

I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.

Advice?

Reyna,

Wow, I've never seen somebody ask if they should househack in CA or move out of CA to househack elsewhere. Usually it's a choice between househacking here or living here and investing out-of-state.

I'm a big proponent of househacking in California because we experience really powerful appreciation here. Househacking here isn't an income play; it's a wealth-building play. By lowering your cost of living, improving a property that needs some work, and having your tenant(s) pay down the principal of your loan, your net worth will really climb while you're househacking. The same principle will apply anywhere, but with less appreciation in, say, the Midwest, you'll be losing out on some of the sweet CA equity growth.

I gotta say, choosing where to live is more than just an investment decision. If you want to stay in Oxnard, you should really look into low-down-payment loan programs, especially the NACA program (naca.com) and find a way to make a househack here work. But if you're at a point in your life where you want something new, if you're itching to get out of CA and start a new chapter, then definitely get going! There are plenty of markets that you'll do well in -- it's just a question of where you want to live.

Good luck!

Best,

Jon

1 Vote

Originally posted by @Jacques Edouard Dessejour Lapierre:

I am thinking of starting my rental property, my very first but I am wondering what happens when you buy a house turn it into a rental and go for the first 2-3 months after acquisition without ever finding a tenant while you still are having mortgage payments. I say this because I will still be renting I am just looking to find passive income.

What to do now?

Jacques, the first thing you should do is look up the vacancy rate in your area to see how likely 2-3 months of vacancy on a correctly priced rental is. I'm in LA, where the vacancy rate is currently 6.5% (it's high because of COVID). That's about 24 days out of the year. So, if I put a new apartment on the market, I'd be surprised if it were empty here for more than 24 days.

Next, you need reserves. Take the amount of vacancy you expect and multiply it by whatever number makes you comfortable. I'd say 4. If you reasonably expect 1 month of vacancy, I think you should have a reserve fund that will cover the mortgage for 4 months.

So, if you go 2-3 months without a tenant, you're out some dollars, but you don't lose the property. Over time, your total amount of vacancy will fall in line with the area average. A bad few months at the start doesn't mean your whole investing career will be hard.

Good luck!

Jon

1 Vote

@Steve Morris, why do you think only the wealthy are leaving and only the jobless are coming?

Wouldn’t the well-publicized cost of living here dissuade lower-income people from setting up camp?

Likewise, I only hear stories of people move out of CA because it’s too expensive for them or they want to retire to a lower-income state. Not a lot of tax revenue heading out in those scenarios.

1 Vote

Austin, Texas

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All Forum Posts by: Jon Schwartz

Jon Schwartz has started 37 posts and replied 926 times.

Post: 40k to Invest as a 23 year old with no job

Post: What do you think the best city to do a house hack in?

Post: New Member nurse looking to invest in Los Angeles, CA

Post: Information about Redlands, CA

Post: Invest in Texas or California

Post: Neighbors Might Want to Walk Away from House

Post: Newbie from Los Angeles, Californa

Post: House hack in California or out-of state

Post: Starting rental properties

Post: ‘Tremendous increase’ in corporate relocations to Texas