Invest while still renting??

Question

hello everyone!

My name is Ryan, and I reside in northern San Diego county. We currently rent in an expensive market. I am about as new as can be when it comes to real estate investing (read: hasn't done anything yet). That said, my area is high end and from all the reading and research I've done so far, it seems like investing in another market (interested in buy and hold) may be a good plan?

I'm interested in it all! Thank you guys in advance.

Ryan

Ali Boone · Answer

Hey Ryan! Not everyone agrees with that plan, but it's my favorite and all I've done with my own investing. I live up in LA, so same situation with prices and such. I like out-of-state because the prices are way better, the cash flow is much higher (it doesn't even exist in SoCal), and I actually like not being able to see my properties or be tempted to drive by them all the time. Everyone has different preferences though, but definitely know it can work!

John Steele · Answer

Hey @Ryan Prange! I live in downtown San Diego and am relatively new to investing (about a year and a half). I ran into the same thing as you down here. Prices are crazy in San Diego county and finding cash flow can be hard. I ended up investing in turnkey properties in other states and it has been working out really well. Houses are a fraction of the cost and I am getting a great return. Feel free to reach out and connect if you want more information.

-John

Mark Shaffar · Answer

@ryan

@Ryan Prange

welcome to Bigger Pockets! It will change your life. There are tons of great ways to invest in real estate. good luck!

James Wise · Answer

Welcome to the site Ryan.

I have always been a firm believer that one should first own their own home before buying a rental property. That said, I have never lived in an expensive market such as SD.

Dmitriy Fomichenko · Answer

Welcome @Ryan Prange it’s a pleasure to have you here! You will find this a tremendous resource for all of your real estate needs. You may want to set up some “keyword alerts” to notify the topics that interest you the most.

All the best to you!

Jody Rouse · Answer

@Zach Adams Good post!  I also live in North County Coastal.  I am at the stage in my life where there is transition.  From all I heard was who was getting married and to whom now its where are u living, do you own, and man how expensive everything is.  In my mind when everything is "expensive" and stays that way its not expensive it is the standard.  Investors and rehabbing properties in this area is key to getting the money.  Lowest price possible and little forced equity as possible.  ive done this twice.  Look forward to this summer in SD!

Joe Moore · Answer

Welcome to BP.  Yes definitely many choose to leave their local area because they are priced out of it.  It is a fact of life that some people will not be able to buy a home in the area where they live.  Investing out of your area can be challenging, but it can be done and done successfully.  Good luck to you!

James Stout · Answer

Ryan,

I'm also in San Diego and I've found that investing for cash flow can be difficult in San Diego County if you don't have a substantial equity portion in the property.  Occasionally I see some good multifamily properties in the city with decent cash flow. Although the price tags are high, the rental income is also high and I believe there is potential for upside in our growing city. I like to look for properties with 3 or 4 units - you can often get more rental income and spread your vacancy risk across more tenants.

I also look out of state for investments and work with some good people that bring potential deals that I arrange for myself, friends and family. If you're used to San Diego prices, you'll be amazed at what you can get in places that don't come with a beach.  Out of state investments can be a great way to pay for the San Diego lifestyle.

All the best!

Bryan H. · Answer

Hi Ryan

Welcome to BP. Many people on the coast have the same issue and thoughts you do.

Why does getting into RE and wanting to buy/hold make sense to you? It's hard to do and you want to try doing it from afar?

If RE is the way you want to invest, I'd recommend one of 100 other methods to invest in RE, especially starting out. Look here http://www.biggerpockets.com/real-estate-investing/strategies-niches

Invest while still renting??

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