Good ole' California

[Garrett Gentry]

Hello, 

I just recently found bigger pockets in a round about way while I was listening to a book written by Brian H Murray. I have spent the last couple weeks listening to as many podcast episodes as possible. While I am still learning and researching as much as I can, it doesn't take an investment genius to know that the real estate market in many parts of California is absurd... In some of the podcasts I have listened to I hear investors talking about how they managed to get their first investment property for 50k or 60k with 20% down, even 90k with 25% down. Mind you, if I resided in a market such as this I am fairly confident that jumping in with 15k to 25k would be a non issue, however, in the market I am in (roughly an hour north of San Fran in Sonoma County) the price of real estate is astronomically high. For instance, if you could find a Class C, single family, 2 bed 1 bath, under 1,000 SF, built in the 1950's for under 275k....you would consider it a deal. The median home price for my area is over 500k. Now, I am by no means insinuating that there are not deals to be had in this area, but as a 25 year old whose net worth isn't even 100k, I am looking for any advice on a good starting point. I would love to hear from Investors in the bay area who were able to get in the game and hear how they made it happen. 

Any advice is greatly appreciated!

[Account Closed]

Garrett, there are many areas in CA that are cheaper.  For instance, from Santa Rosa, you could look at Redding or Eureka or even Crescent City, etc.  Those areas are very affordable and the demand is decent.

The upside to investing in CA is that Prop 13 will stabilize your property taxes.  Your property will only ever be assessed at the sales price you bought it for.  You should look long and hard at any other areas you might think about investing in.  Any unknown future costs are scary as far as future profits.

I learned to love the college student market.  It's constant, no matter the economy.  So, of the affordable areas in CA, I'd look at college markets.  

That would include Eureka, and maybe even Fresno - though I'm not sure Fresno is all that affordable now comparatively.  

At any rate, I'd look at university towns, and buy as close as possible to the university.  I'd also buy a multi-family property, if I had the choice, with small studios, or a property I could convert to small studios.  And fill them with students - preferably grad students, and in a perfect world they would be law or medical students.