Southern CA New Guy Looking For Advice

[Eric Martinez]

Hi all! I am new here and have been listening to the podcast for a couple months now and love everything about it. I understand all the strategies and avenues various guests have applied to become successful but I feel like living in Southern CA is a disadvantage because of extremely expensive real estate. I am currently in my 3rd home starting from a condo and now in a single family in an amazing neighborhood (bought the worst house in the neighborhood for the location), meaning I understand buying and selling real estate. My question is...what are your tips for starting off investing in real estate and living in expensive SoCal? Look inland? Explore other states? Any tips are very much appreciated!

[Jon Schwartz]

Originally posted by @Eric Martinez:

Hi all! I am new here and have been listening to the podcast for a couple months now and love everything about it. I understand all the strategies and avenues various guests have applied to become successful but I feel like living in Southern CA is a disadvantage because of extremely expensive real estate. I am currently in my 3rd home starting from a condo and now in a single family in an amazing neighborhood (bought the worst house in the neighborhood for the location), meaning I understand buying and selling real estate. My question is...what are your tips for starting off investing in real estate and living in expensive SoCal? Look inland? Explore other states? Any tips are very much appreciated!

Eric, welcome!

If you're on your third primary residence, then you know how powerful appreciation is in SoCal.

I'm on my third primary residence, too, and this one is a duplex househack. I have a wife and a toddler, so it's not the traditional setup. We live in a 3/3 in Hancock Park in Los Angeles; the unit under us is a 3/2 luxury rental.

I decided to keep my money in SoCal because I don't need cashflow now. I have income from my day job. However, in a decade, I'd like to quit the day job (or at least be able to!). With that timeframe in mind, I'm keeping my money in SoCal to let it appreciation in high-value properties. I'm also forcing appreciation through renovation, and with our low-cap-rate environment, forced appreciation is incredibly powerful.

I've explored less expensive areas around LA, was far inland as Riverside and San Bernardino County. There are pro's and con's there, I'm finding. Less expensive real estate is often less expensive because it's less desirable. At the same time, I've found some promising pockets.

Where in SoCal are you? More importantly, what goal or goals are you working toward? What are you trying to get from investing in real estate (in terms of life outcomes)?

Best,

Jon