New member from Los Angeles(Santa Clarita), CA Duplex/ FHA loans

[David Le]

Hi Everyone!

My name is David from Los Angeles. I just turned 22 years old in July. I was originally born in New York, but raised in California. I'd love to connect with some of you in this community. That is why I upgraded to the Pro membership, because I believe it's a great opportunity to learn from all of you. I have decided that I want to start with buying a duplex, because I will be able to live there for a year. This will give me a chance to learn how to landlord and teach my mom how to landlord as well. I've learned that one can get an FHA loan. However, I don't know if it's possible since my credit score is not great. Can anyone that has had experience give some advice on where I can get an FHA loan? Who can I go to? What are things to look out for? What are the right questions to ask? If anyone can share their story on how they got started with buying duplexes would be greatly appreciated. My goal is to find a duplex in the Los Angeles area by January. Thanks for reading and taking your time to help guide me in the right direction. It's greatly appreciated.

[Logan Allec]

Hey @David Le, I am a newbie too, but I thought I would share what little experience I have with you since we are similar in goals and location.

If you are intent on staying in Southern California, you may have to start looking in rural areas to find a property that you can owner-occupy with FHA financing. I looked for months in Los Angeles proper as well as Santa Clarita with no luck...made several offers, but was beat on price or terms by all of them. In a crazy seller's market like this, a seller has options, and that usually means that the FHA buyer will be at the bottom of the list, conventional buyers will be in the middle, and all-cash buyers will be at the top.

However, that was just my experience. Your mileage may, of course, vary. So long story short, this Thursday I am closing on a four-unit property in a little place called Sleepy Valley off Sierra Highway on the way to Agua Dulce that I am financing with an FHA 3.5% down loan. Will it be a good investment? I'm not sure, but since my down payment is so crazy low, I'll probably only be putting $35k into this deal after down payment + repairs are done, and at the very least I can now say that I've made my first move in real estate investing rather than tire-kicking like I have for years. If I would've discounted this area because it wasn't "ideal," I would probably still be looking for a property and not finding one. So bottom line: don't limit yourself in terms of location.