Want to buy a rental property. Have income but no down payment

[Ryan Jonson]

Hello.

I only have 20k saved up so far and have an income of about 4k/month after taxes/expenses.

I am around Los Angeles, CA and all the housing prices here are riduclously high. A 2 bd condo goes for 400-450k (and rents for about 2.0-2.5k/month. 

The crappiest houses start at 500 and any decent one is 750k+.

Does anyone have any advice as to what I should be looking to do?
Thanks.

[David Faulkner]

If you want or need less expensive RE, then go East young man ... I would say head up the 2, to 210E, then maybe up the 14. You will pass by all kinds of less expensive areas from Tujunga all the way to Lancaster. One warning, though, they won't likely appreciate as much or fast as Glendale (which is how they got to be less expensive in the first place), prices will be more volatile (they'll get hit harder in a downturn) and cashflow while initially larger will also be more volatile (lower quality tenant base), so there is never any free lunch. I'd look in the nicest neighborhood you can reasonably afford ... smallest, most run down house on a really nice block sort of thing. That has been a winning formula for me over the long haul ... my bachelor pad was actually in Glendale ... I love it there and did quite well there profit wise as well ... I've also invested in Lancaster & Palmdale, and in your likely price range that may be your best bet ... you can get a single family home in a decent neighborhood or maybe even a duplex there for under $200k. Do NOT venture out of state your first time out. Do NOT buy fully rehabbed/turnkey either local or out of state. I would save more too ... a bit under capitalized IMO ... I'd shoot for $50k of savings (20% down on $200k property plus closing costs and some cash reserves ... I'm a financially conservative guy).