Help establish a newbie's strategy out of the gate? (100k to start with)

[Thomas Mc]

Hello all,

This is my first post on biggerpockets, nice to (e)meet you all! I'm excited to have finally found an online forum with such a vast collective knowledge. The purpose of this post is to gather as many viewpoints as I can regarding 2 possible strategies that I am considering implementing in my initial REI strategy. I appreciate any and all input you may have.

A bit of backstory; I'm a 29 year old design consultant in Los Angeles who has been very much into commodities and equities trading for the last 5 years. I have been successful in this and have wanted to diversify my portfolio to include REI, with a goal of moving a significant portion (>50%) of my portfolio into REI over the next 5 years. The main reason for this is because I don't think the current stock/bond/sovereign debt markets are sustainable for much longer and real estate has deflated just enough for me to become more comfortable with it. Although this will be my first rental property purchase, I have read voraciously about REI for the last 3 years. In some ways, I feel as if I've over-studied this industry on paper and have not engaged in enough "actual" situations. So, my goal for the next 12 months (hopefully by the time I'm 30) is to have my first rental property closed.

I have an odd advantage that a friend is just starting out as a real estate broker, so as she is getting started in her career, she is acting as somewhat of a birddog for me. She'll send me about 3 properties a week that look to have potential for free, which is a great advantage.

So, here's where I need some advice... I am looking to start with purchasing at least one duplex, triplex, or SFR in West Los Angeles near where I currently live. I figure that having a low-unit-count property that is close to home will make learning more easy, especially since I have a full-time job outside of RE. I have roughly $100k worth of liquid assets that I can convert to cash for these purposes. What I am undecided on is whether to sink this $100k into one property or whether to distribute the $100k into two properties (i.e. $50k into each).

In West L.A., these types of properties are typcially in the $400-550k range and may not turn a rental profit if I put much less than $100k down at the start (unless I find a killer deal or magic foreclosure or something). My initial hunch is to go this route so that I can focus on one property only, but I know that I'd be putting my eggs into one basket so to speak.

The other option is to look outside of west-LA and find cheaper properties inland. This would be difficult since I would be further from them, but would any of you recommend one situation over the other? I wouldn't be opposed to bringing in investors to help with the $ side of things, but I don't have any experience in that side of things yet. I'd obviously get more leverage this way, but I'm not sure that I'm comfortable with this type of situation on my first property.

If anyone can categorically recommend one over the other, can you please provide reasons why? Or, simply describing your experiences with both would be very helpful to a newbie. Thanks for all your help!

-T