Should I buy a duplex in OC where I have to pay out of pocket every month?

[Brenda Garcia]

Hello all, I am in the middle of my first 1031 exchange. My investor and I owned the sold property 50/50 and now I am buying the next property on my own. 

The property I like is a $1.1MM duplex with under market rents in Costa Mesa; a city that appreciates well. But with 50% of net proceeds and another $100k for the down payment I am still going to have to pay +$2k a month to cover the expenses (largely impacted by the 7.5% interest rate). It would take until about end of Year 3 to break even monthly and thats assuming market rents and a refinance to a lower rate. Is this worth it? I am a long term investor so I think I will make my money back but others are telling me I will be in the red for too long. I appreciate any advice!

[Alex Olson]

@Brenda Garcia Have you looked out of state to invest? More bang for your buck and is not any harder. You can read David Greene's book on our of state investing as it is a great starter point. Midwest typically has better cash flow and more doors for the money can be purchased.