Why Invest in CA?

[Scott J.]

A little background:

I've lived in CA my whole life and bought my first property about 2 years ago. It's a two separate structures on one lot (1300 & 600 sqft) and was around $500k. It's a historic home (property taxes reduced by 60%) and in a great downtown area in Orange County. I currently live in one and rent the other, but if I were to rent both out, I would barely make positive cash flow.

I will be buying a 3 or 4-plex in about a year in the $500-600k range. Out of the best deals I can find (top 10%), cash flow is typically only $200-500 positive per month. We are buy & hold investors.

My point:

I always read about deals in other states, such as Texas, where investors are buying $150k properties and having $400 monthly cash flow. My question is, why invest in CA? I know you have the higher likelihood of appreciation. But is it worth it?

[Aaron Mazzrillo]

California is the best marketing in the country to invest in right now. I hear so many investors claiming they are getting great returns in other states, but every time, my numbers have consistently beaten them. We are seeing 30%+ returns on the cash we have into our deals.

You need to broaden your view and stop looking in OC. Condos out there in specific areas make sense, but the majority of residential property makes no sense to hold.

I find it extremely interesting that Orange County investors won't buy in Lancaster, Palmdale, Victorville, etc, but make ever excuse in the Word to send their money all the way across country.