Hello- New Investor from Southern California

[Chris Modzeleski]

Hi Everyone,

I live in Orange County, CA, and after biding my time and saving up for the last few years, it seems the time has come to take the plunge and buy some property. I'm mainly interested in cashflow, since that seems to be so much more reliable than hoping for appreciation, and the best cashflow seems to be in the low end areas. For quite some time now I've concentrated on looking at two of those, the far reaches of the Inland Empire (Hemet, Victorville, Desert Hot Springs, etc.), and the least desirable parts of LA (South Central, Compton, etc.) I don't really have the desire or ability to directly manage properties myself, especially in areas like that, so I'd probably be hiring a management company. So a big question that I'd like to ask everyone is what they think about the merits of those two relative to each other. The IE areas seem to be less scary, even in the worst parts, and have significantly more landlord friendly local governments compared to LA (no rent control or intrusive local housing bureaucracy), however vacancy tends to be higher there, and the economy in general is much weaker, plus the area could see an exodus if we enter a prolonged period of much higher gas prices. LA on the other hand, seems like it'd be easier to keep rented, but with much scarier neighborhoods, and oftentimes rent control. What does everyone think about this, and have I missed anything in my analysis?

PS I'm mainly looking at 2-4 unit properties
PPS: Please also say if I'm barking up the wrong tree entirely, and if you feel that the extra income by buying in these areas is not worth the hassle/risk