Cash flow in Socal

[Neil C.]

Hi guys - wanted to know the best areas in Socal you can purchase a home and truly cashflow from it? I know San Bernardino has real cheap properties, but what are some other alternatives?

Thanks!

[Brian O'Connor]

Hi Guys,

I know I’m a little late to the game with my reply, but here goes…I too am frustrated by investment opportunities in SoCal. As a beginning investor, when I run the numbers I keep thinking...that just can't be right. But it is. Cash flow is a very rare find here and I have yet to find it. If people are able to cash flow in SoCal, my assumption is that they’ve usually “purchased cash flow” with a large down payment (>20% down).

Like some of you have mentioned, I have considered Riverside and San Bernardino Counties, however I have a problem with those locations for a few reasons.

(1) I haven’t really seen many good deals, at least based on properties advertised on sites like Redfin and Realtor.com. They're only slightly better than most listing in SoCal. At least in SoCal/Los Angeles County I should be able to experience decent appreciation.

(2) I don’t have a good feel for the area, so I’m hesitant to purchase in the wrong type of area (bad location, bad pool of tenants, etc.).

(3) I'm a beginning investor who intends to be a hands-on property owner (at least as much as possible at the start), which means a lot of long drives from L.A. showing properties, dealing with utility companies, handy-man/contractor visits, etc. The only ways around this that I can think of is with a local investment partner (which would be fine if you trust them) or a property manager, which cuts into your cash flow quite a bit.

Similar to Andrew’s response, I’m just buying time, learning as much as I can about real estate, and keeping myself open to opportunities outside of real estate. Regardless, it’s nice to know that others are in the same boat as me in SoCal. But, hey, we have great weather, right? Now about those property taxes…

Brian