Newbie Investor Situation & Questions – Southern California

[Matthew Runfola]

Hello Everyone,

I am obviously a novice here, but I am eager and understand it’s going to take time to get things moving forward in relation to my current circumstance. I am looking to hear some advice or general direction to go in regarding my criteria and focus. I really want to get into buy and hold, but open to hearing other strategies. Trying to figure out how to adapt a buy and hold strategy to my situation in relationship to my goals. As a result, I am going to list my situational variables to help with the possible advice/solutions here. I know I have some BIG challenges, but I am not going to let them stop me.

My Status and Reality Check:

Current Debt: $10k Credit Card (2008 to 2012 were some rough years for me). I am slowly but surely paying it off. I am very budget conscious and practice it with my funds. I have no student loan debt or car debt.

Credit Score: 735.

Home Owner Status: I am renter in Long Beach, CA. I am looking to maybe make my first primary resident purchase next year in 2019. I am veteran and qualify for a VA loan, but my soon to be fiancée is not open to house hacking or moving out-of-state.

Area I Live In Market Status: I reside in is Southern California (Orange County/Long Beach Area) – Surrounding possible counties for investment San Bernardino & Riverside.

Savings Status: Less than $2k, but slowly growing.

Job Status: Work Full Time (45 to 50 hours a week) in Non-Real Estate related industry.

Resources Status: Limited to Non-Existent. Unfortunately, I do not come from a family or friends of financial means. My current social situation I am wanting to change and surround myself with likeminded individuals doing what I want to do in regards to REI. Currently I don't know anyone doing real estate within this category, but I am strongly attempting to make efforts to change that.

Mentor Status: I have no mentors at the moment.

REI Education & Networking Status: Have read 6+ REI books in the past 3 months and attended my first local REI meeting in the past week.

Monthly Livable Income To Achieve: $3500 a month ( I have the long term goal in mind, but trying to figure out the short-term to bridge the gap between the two concepts)

Given I am a beginner with limited means then I at least want to learn to analyze deals, but that gives me the challenges as I will list my questions below to address that.

Questions:

Provided with these variables in my present state of affairs I have the following questions:

• 1. How or what value based on my current status could I bring to the REI community in relationship to help me grow?
• 2. If you were in my situation what are some markets or strategies I can consider to look at to analyze properties or deals in relation to my second question?
• 3. Given my financial resources and debt to savings ratio. How should I approach getting into real estate financially speaking since I don’t have the Bank of M&D (Mommy & Daddy) or a rich uncle nor a mere $20k laying around waiting to be put toward real estate investing. Should I just sit on the sidelines and wait until I find a long lost relative
  • a. I want to find the deals, but not sure what criteria (market, multi vs. SFR, etc.) to use and what happens when I find something, and don't have the financial resources to utilize to get started on them? Do I just go around and pitch until someone says yes?
• 4. I s buy and hold plausible with my situation in the areas I live in? Why or why not?

It’s been suggested I take a look at Multi-Family deals in around the San Bernardino/Riverside markets as a start to at least analyze deals, which sounds like it would be a good exercise for me to do. I am leery on out-of-state for my first deal, but maybe someone has a convincing counter-perspective. I am willing to give what time I can outside of my job, which are weekends and after normal work hours. Also I am willing to partner and put what limited amount of finances I have or can find. Thanks for any responses to this. Thank you.

-Matthew

[Nicole Candelario]

Hi @Matthew Runfola,

I'm new to investing in SoCal too. You are so encouraging! I live in the Inland Empire and I found a REI meetup group in Riveside (they meet at the Mission Inn on Wednesday evenings). Too bad your significant other isn't interested in house hacking! We bought a small (4 unit) multi family in Cherry Valley (Beaumont) and live in one of the units ( a beautiful 3/3 with a pool/jacuzzi) and rent out a duplex and a 4/2 house all on the same property! Yes we have to be landlords but in our experience, living so near the tenants kind of keeps them on their best behavior. Okay so the fun part is that the tenants pay 90% of our mortgage! So we live here for nearly free! This gives us 2 options for investing.....1) we can give ourselves time to learn and absorb as much education as we can while our property increases in equity until we can pull out a HELOC for our next investment OR 2) do #1 and try to find a hard money lender to fund our next deal and use our property as "skin in the game" when they ask what experience we have. I understand that you have almost the EXACT financial situation as we do, so if you can find a house hack that would be awesome! We used a program called NACA. Not sure if I'm allowed to suggest it but it's a non-profit organization that helps people like us. Zero down payment! Credit issues can be explained! No PMI! I don't work for them, we just used them to purchase our home. Good luck and hopefully we can work together in the future!

Nicole