First Deal...but my area is extremely expensive

[Drew Slater]

Hi everyone,

This is my very first post. I would like to start off by saying how much I absolutely love this community just from everything I have witnessed over the last few weeks of scouring the forums. It's amazing to see people going out of their way to help others out!

My question is fairly straightforward. I live in one of the most expensive areas in the country, Southern California (specifically Orange County). I make a modest income, nothing crazy, but am very smart with money and do not have much debt. My issue is that for my first deal, there is no way that I can afford to buy a place within a reasonable distance from my home town and place of employment.

I was thinking about starting off by purchasing something out in the desert (29 Palms area) where it is much more affordable. But to be honest, I am using a HomeReady loan and do not see myself actually moving out to the desert and driving 2-3 hours to work everyday. I also do not want to rent the place out and get in trouble for mortgage fraud...

I am eager to start my real estate investing career, but am not quite sure how to overcome this dilemma. Any pointers or feedback would be greatly appreciated.

Thanks again!

[Dan H.]

Originally posted by @Matt R.:

@Caleb Heimsoth Average eviction time in LA County takes 6 weeks and can be as little as 3 weeks. Don't pay your rent and beleive it you will be evicted pretty quickly in most cases. It depends on the area but in some CA areas evictions seem less common when compared. Anything can happen still. 

In addition to what Matt indicated, I do not know a landlord in San Diego who has had to formally evict a tenant.  I have been doing this for a while and I have not yet needed to formally evict a tenant.  I basically informally evict when I provide a move-out date.  If they miss their payment they have always been out fairly fast.

The reason tenants want to avoid being evicted is because the tenants realize that with an eviction they will be very limited where they can rent.  This is because the vacancy rate is very low.  I have a criteria for my units of tenant never having been evicted.  It is in my ad postings.  If when I screen I find an eviction then the screening is over and they do not get their application fee back (typically it has been spent to find out about the eviction).

So there may be tenant friendly laws but in practice the low vacancy rate makes San Diego a very Landlord friendly city.

As to the OP, I see many posters from out of state suggesting various ideas but RE in So Cal is different than most other areas.  I suggest you network with experienced OC RE investors and inexperienced OC RE investors.   You never know here that would lead but a great scenario would be a partnering.  Imagine 3 newbies partnering on a detached triplex with each unit having its own yard.  The key is the networking needs to be local.

Good luck