How California's wildfires could spark a financial crisis

[Tejas Padhiar]

Hi Everyone,

I am a newbie to the Bigger Podcast family and am excited to join the community. My wife and I started listening to the podcast recently and have been enjoying getting educated on investing in real estate. We live in Los Angeles and are trying to decide if we should purchase our first home to live in or invest in a condo to generate cash flow and buy a bigger property to live in next year. I came across this article on Reuters about how the wildfires in California could spark a financial crisis and wanted to see what you all thought about the article:

https://www.reuters.com/article/us-climate-change-market-fire/how-californias-wildfires-could-spark-a-financial-crisis-idUSKBN2611TK?utm_source=morning_brew

Look forward to hearing everyone's thoughts.

Tejas

[Ali Boone]

Originally posted by @Tejas Padhiar:

@Joe M. Thank you very much for the 2 cents.

@Lee Ripma I appreciate the feedback and advice. I have been living in Los Angeles since 1994 and like you I love LA and am not willing to bet against it. I just noticed that you were on a Bigger Pocket podcast and my wife and I are looking forward to listening to it.

@Ali Boone My wife and I are certainly leaning towards investing in a investment property as opposed to a primary home. Your advise about investing in something that has the best chance of appreciating is in line with what we have been hearing from others as well. What you said about condos also makes sense and something we had not thought about much. Since we are new to this I need to learn about running numbers but I am glad that I joined this community where everyone is so helpful.

Great to have you on here! Awesome place to start learning, and sounds like you've been hearing some good advice. If you want some basic help on running the numbers, check this out-

https://www.biggerpockets.com/...

Those are mostly equations for cash flow, but you'll want to run those even if you are investing just for appreciation. Ultimately, you want to make sure you know where you're profit is going to come from. If it's going to be from appreciation, what solid information do you have to assume the appreciation will happen as expected? And how much appreciation would you need to be profitable? (don't forget to account for mortgage interest expenses if you're financing). Learning stuff like that... it'll set you up way better down the road to be profitable! Knowing exactly what you're getting into versus shooting a dart wearing a blindfold.