Is cash flow on a first property in SoCal possible?

[Account Closed]

Hello folks,

I have began reading the bigger pockets book on rental property investing and one of the things that Brandon mentions is to buy a rental property that offers cash flow today. 

My situation:

I am looking to buy a 2 or 3 bed condo or townhouse in which I will live in and have tenants. Given the prices in socal it's going to be very difficult to have cash flow from any property I chose to buy unless it's in an awful neighborhood. It seems as if my best options are having my tenants pay most of the rent while I am able to continue to keep working my main job and saving money by not having a pricey mortgage. Is this the best possible option in SoCal?

Thanks for any advice.

[Andrew Fielder]

Cash flow is relative to your equity input. The less leverage you have the more likely you will have cash flow. You need to focus more on return on equity rather than cash flow. For me, I want to put my precious capital to work and maximize the return, I don't care about cash flow as long as my return is maximized in my investment time frame. To do this you need to leverage.

I have a condo in OC, at the end of the day I have no cash flow but the value has gone up from $200k to $250k in 2 years plus repayment of principle and tax advantages. In the weaker markets it's the opposite, little to no appreciation and good cash flow.