New to Multi-Family Investing in Los Angeles Area

[Christopher Mitchell]

All,

I recently moved to the Los Angeles area (Redondo Beach to be exact) and am looking to get involved in multi-family real estate investing. Being both new to the area and new to real estate, I am looking for any advice specific to the area and ways to get started. I am a military member and am planning on using a VA loan as well as looking to house hack once I find the right property. One of the first things I will be looking for will be a loan source, preferably an institution that has worked with VA loans before and will set me on the right path. Any contacts or advice in this regard would be greatly appreciated! I am hoping to keep my search closer to the beach towns (Torrance, Redondo, Hermosa, Manhattan, El Segundo) but am aware that prices may be a bit out of my range as a young military officer and am flexible on location.

Being in the military gives me many connections to other military members in the area and I am more than willing to help expand networks. I am new but excited to get started and will greatly appreciate any advice I can get! 

Thanks everyone!

-Chris M

[Jon Schwartz]

Originally posted by @Christopher Mitchell:

All,

I recently moved to the Los Angeles area (Redondo Beach to be exact) and am looking to get involved in multi-family real estate investing. Being both new to the area and new to real estate, I am looking for any advice specific to the area and ways to get started. I am a military member and am planning on using a VA loan as well as looking to house hack once I find the right property. One of the first things I will be looking for will be a loan source, preferably an institution that has worked with VA loans before and will set me on the right path. Any contacts or advice in this regard would be greatly appreciated! I am hoping to keep my search closer to the beach towns (Torrance, Redondo, Hermosa, Manhattan, El Segundo) but am aware that prices may be a bit out of my range as a young military officer and am flexible on location.

Being in the military gives me many connections to other military members in the area and I am more than willing to help expand networks. I am new but excited to get started and will greatly appreciate any advice I can get! 

Thanks everyone!

-Chris M

Chris,

Firstly, thank you for your service.

Secondly, welcome to LA!

You're totally right that step #1 is figuring out your loan situation. That'll give you an understanding of your budget and options. When it comes to house hacking, including with a VA loan, the most knowledgeable loan broker I know is @Jonathan Taylor. Definitely recommend reaching out to him.

Once you have a budget in place, it's time to think strategy and location. What's more appropriate for your life/work situation: buying a property that doesn't need much work, or taking on a project?

Regarding location, the beach cities are crazy expensive! A lot of tech firms have opened in Marina Del Rey and Santa Monica, and with them, a lot of tech workers have moved into the beach cities. That's driven prices through the roof.

One thing I do is generate maps from Census data to identify prime areas for investment and house hacking. For example, here's a map showing the current median income and five-year income growth in the beach cities:

The colors represent current median income, and the size of the arrows represents median income growth over the last five years.

You'll notice that the beach cities are very green (ie, wealthy) and have large arrows. But just inland, you'll see yellow and red areas (ie, lower price points!) that also have large arrows. I think you should target these middle-income, high-growth areas. You'll find more options at your price point, and you'll continue to ride the growth as the costal wealth has nowhere to go but inland.

One more tip: do you bank with USAA? If not, you should; their insurance rates are great! I'm currently house hacking a duplex near Hollywood, and I shopped around a lot for insurance. Nobody could beat USAA, though!

If you have more questions, I'm a resource for you!

Best,

Jon