Are San Diego and Orange County too expensive for a beginner?

Question

Hello! First and foremost I want to say how much I appreciate all of your advice ahead of time. It has been about 2-3 months that I have been obsessing over the knowledge and practice of real estate investing. Basically to make a long story short I recently just moved from San Diego to Irvine California for a new job opportunity in which I will most likely be making lower six figures at start, and at the moment do not have any capital to invest. In a years time I'm hoping to have a decent down payment to invest into my first place to live which I have been extremely interested in perhaps a duplex or triplex using an FHA loan as a start to my long term investment career. Now a lot of the books and other material I read, when showing examples of situations of certain purchases I easily know they are not speaking of these purchases in San Diego or Southern California really in general as the price is dramatically different than the price point of many So Cal real estate. I mean many duplex, triplex, foreplex in my area are easily 600k-2m which is almost discouraging for a beginner investor as myself. I mean I'm not to sure what to even do at this point. Not that I wouldn't be able to afford it but that would take much time as well as pretty creative financing to even begin to my understanding. Any advice PLEASE would be absolutely great THANK YOU. (Excuse spelling or grammer as I am currently squezzing this post in while at work on my phone)

Jake Thompson · Answer

Hi Bernard, Justin is right, house hacking can be a great route whether you live in san diego or a tiny town like Aberdeen, WA (Where Brandon Turner is from). I just bought my first property in san diego using VA loan. I ended up with money back at closing and I pay less per month to live in my 3 bedroom house than I was paying to rent my 1 bedroom apartment. Feel free to message me if you'd like more details. Just know it is possible, although it might take a little patience to find an acceptable property!

Paul Timmins · Answer

@Bernard Royal

Welcome.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses,  The Book on Estimating ReHab Costs  http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul

Bernard Royal · Answer

@Jo-Ann Lapin I've seen your group before on Meetup. When is the next gathering?

Jo-Ann Lapin · Answer

No not at all

Aaron Kan · Answer

Is that group only women allowed?

Jo-Ann Lapin · Answer

Welcome  neighbor. There is terrific group in Irvine called Women's invest group that meets once a month. Great for learning and networking.

Dan H. · Answer

If you are planning on house hacking it sounds like it either has to be OC or you need to work/live somewhere else (unless you like a long commute).   I like the idea of house hacking and agree with @Justin R. that you have advantages over typical investors that would allow you to purchase and profit where a investor that is not house hacking cannot.

I am also big fan of So Cal investing in general and have posted before on the advantages of So Cal residents investing in So Cal.  They include Prop 13 protection, increased values due to high demand and limited supply, benefits of investing local rather than remote (including repairs, expertise of neighborhoods, etc.), ability to cash flow, etc.  My family has tried the out of state investing and no longer look for out of state REI (we have one unit left in Alabama - Lake front).

If I were much younger I would house hack entry level then house hack when I moved up to something a little nice, etc.   Repeat until you reach a quality of home that would be difficult to find that quality as a multiplex.  At that time you may have 3 or 4 multiplexes and have significant net worth and monthly revenue.

Good luck.

Justin R. · Answer

@Bernard Royal No, I don't think SD or OC are too expensive for a beginning to start IF you're planning to house hack.  If your property is owner occupied, you have two advantages over other investors: (1) your financing will be cheaper and (2) you'll have access to lower down loans.  Properties that won't work for people like me can work for someone in your situation for those reasons.

The price for those advantages is that you're combining two separate parts of your life: where you want to live and where you want to invest.  You'll probably have to compromise on at least one of those.

You may want to chat with @Jacob Thompson about his experience as he went through this exercise locally quite recently.

Good luck!

Bernard Royal · Answer

I want to say thank you to all of you thus far and keep the advice coming! I woke up this morning to all of your replys realizing how much of a support system I am so fortunate to have here on bigger pockets and in San Diego/ Orange County alone! As you can tell I am quite new to the page so don't know how to reply to a lot of you on here but I have sent a couple of you private messages sending my thanks. Would love to network with many of you in the OC area and pick some of your brains in exchange for coffee or lunch my treat. Thanks guys you have no idea how much this has helped.

Are San Diego and Orange County too expensive for a beginner?

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