First rental property in Los Angeles , CA

[Steven Diaz]

Hi everyone,

I’m new to BiggerPockets and have been interested in real estate investing for over 2 years. I’ve read a lot and just wanted to know how anyone got started in the Los Angeles, CA or California in general for their first rental property?

Appreciate anyone who’s willing to give a newbie advice. Thank you!

[Sanjeev Advani]

@Steven Diaz welcome to the community.  Its a great place to learn and meet people.  

I think the big step is the one you just took in engaging with the community, and the next big step would be to set your criteria to help you start searching for your first property.  

Depending on the size of the budget, and your goals, you will have two very different investment strategies.  Lets focus on just two markets in CA right now - LA and Bakersfield. 

Assuming you have a budget of $1M+ I would recommend that you could start by building your investment portfolio through flipping properties in the SoCal area because the appreciation and quality of construction is pretty good. On top of that, the ROI for improving a property seems to give better returns in that area, especially in that price range.

Assuming that you have a budget of $1M or less, I would recommend going Buy and hold in a cash flow community like Bakersfield (6%+ Cash on cash returns).  This will help build your wealth over the long term and take you out of the crazy ups and downs of some communities around CA and the stock market volatility.  

Assuming that you have a rather small budget, I would recommend coming into Bakersfield and looking at the lower end for buy and hold/flips. Depending on your want to grow your cash flow quickly, I would look into the BRRRR strategy in Bakersfield as well because you can fix the property, then get good cash flow and refi to get the next property.

I would be happy to chat further.  Hope this helps a little.