Newbie from LA

[Nestor Hernandez]

Hello Bigger Pockets Community!

I am new to real estate and based out of LA looking to learn more about out of state investing! I'm excited to be a part of this community and eager to learn! Looking for people in LA doing local meetups with the same goals.

[Lateefah Mathews]

Hey @Nestor Hernandez Welcome to BP! Good luck on your investment journey!

[Andrew Syrios]

Welcome to BiggerPockets Nestor and good luck investing!

[Samuel Diouf]

Hey Nestor, welcome to BP

Keep reaching out and networking, best wishes!

[Zeke Liston]

Quote from @Nestor Hernandez:

Hello Bigger Pockets Community!

I am new to real estate and based out of LA looking to learn more about out of state investing! I'm excited to be a part of this community and eager to learn! Looking for people in LA doing local meetups with the same goals.

 Hey Nestor, there are tons of great resources and books about out-of-state investing in BP. I'd love to connect, I'm based here in the Ohio market. 

[Nadeem Alamgir]

Welcome to BP @Nestor Hernandez! What areas out of state have you considered looking into? 

[Min Zhang]

Hey Nestor, welcome aboard! I recommend reading “Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties” - I found it to be very helpful when I got started investing 2.5 years ago.

Here is a summary of the book.

https://www.nateliason.com/notes/long-distance-real-estate-investing-david-greene

The book also mentions the importance of having a rockstar Realtor, contractor, lender, and property manager. Let me know how I can help!

[Michael Smythe]

@Nestor Hernandez be very careful as there are many OOS crooks trying to sell investors crappy properties with fake numbers!

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

[Rick Albert]

Hey Nestor,

Good luck! You came to the right place. I'm a 2x house hacker here in Los Angeles (and a case study in the BP House Hacking Strategy book). Happy to chat if you would like.

Best,

Rick

[Simon Ashbaugh]

Quote from @Nestor Hernandez:

Hello Bigger Pockets Community!

I am new to real estate and based out of LA looking to learn more about out of state investing! I'm excited to be a part of this community and eager to learn! Looking for people in LA doing local meetups with the same goals.

Hey Nestor, welcome to BiggerPockets! You should have a system in place when investing out-of-state, I recommend that you read this article about your Core 4 to real estate investing. This will be beneficial to your journey! All the best!

[Manny Vasquez]

Welcome to the BP community Nestor!   You have come to the right place for all things Real Estate related!  You mentioned that you are mostly interested in looking for out of state investments.  Don't forget you have some excellent opportunities here in SoCal!

There are several meetups happening all over LA.  There you will find plenty of investors, lenders, flippers, house-hackers, appraisers, etc..make friends with everyone at the meetings, most people will be happy to share their RE journey.  Remember, there is no 1-specific road to success, listen to everybody's journey and then decide which road you want to take.   I hope this helps and good luck!

[Maureen McCann]

Welcome to BP Nestor and congratulations on finding this valuable site along with identifying real estate as your long-term wealth builder!  You are going in the right direction.  I have 16 years of investing experience and have been involved in over 5K real estate transactions.  There are some good meet up groups in LA. I am in San Diego and know of a few of them. I would be happy to make the introduction to a good group led by my good friend Lloyd Segal. Feel free to message me and I will make the intro. 

Investing out of state can be done easily as long as you align yourself with the right company. I can help you with some recommendations too.  Cheers! 

[Ellie Ochoa]

Hey @Nestor Hernandez

I actually thinking on starting a meetup in the Covina area since there are not a lot of meetups on this side. If you are interested let me know.