Getting Started in LA

[Cynthia Sigler]

Hello! I am moving to LA for work in a few months and wanted to take the opportunity to get finally actively involved in real estate investing. I'd be most interested in a live-in flip or house hacking, and this would be my first house purchase. The LA market seems like a tough one for someone starting out with limited cash (I've got about 50K available for down payment/closing costs). On top of that inventory is low and demand is high at the moment. That being said, I know that is is possible to get a good deal in LA and that there could be benefits to investing in a desirable market even if it might cost more upfront. I've also been interested in RE investing for a while and I want to take action. My question to some seasoned investors and people familiar with the area is - do you think that the current LA market is a good one to get started in? If so, what neighborhoods and areas would you recommend focusing in on? The alternative could be to rent in LA and invest outside of the city or state, but I definitely want to explore all options. 

Any additional thoughts or bits of advice are also welcome! Looking forward to connecting with and getting to know this BP community. Thanks!

[Jon Schwartz]

Originally posted by @Cynthia Sigler:

Hello! I am moving to LA for work in a few months and wanted to take the opportunity to get finally actively involved in real estate investing. I'd be most interested in a live-in flip or house hacking, and this would be my first house purchase. The LA market seems like a tough one for someone starting out with limited cash (I've got about 50K available for down payment/closing costs). On top of that inventory is low and demand is high at the moment. That being said, I know that is is possible to get a good deal in LA and that there could be benefits to investing in a desirable market even if it might cost more upfront. I've also been interested in RE investing for a while and I want to take action. My question to some seasoned investors and people familiar with the area is - do you think that the current LA market is a good one to get started in? If so, what neighborhoods and areas would you recommend focusing in on? The alternative could be to rent in LA and invest outside of the city or state, but I definitely want to explore all options. 

Any additional thoughts or bits of advice are also welcome! Looking forward to connecting with and getting to know this BP community. Thanks!

Cynthia,

Investor, house hacker, and realtor in LA here.

Firstly, LA isn't a market; it's a couple dozen markets. 13 million people live in metropolitan Los Angeles -- which is more than Nevada, Arizona, and Utah combined.

There are a bunch of great markets in LA! A few neighborhoods that come to mind are Long Beach, Inglewood, West Adams, Jefferson Park, Leimert Park, Mid City, Rampart Village, Chinatown -- and these are all west of the 5! (You'll get that reference once you move here.)

Your biggest challenge is going to be funds. LA is a difficult market to start in because it's so expensive. However, it's not impossible to start here. A few suggestions:

- Definitely pursue an owner-occupied investment, like a house hack or a live-in flip. This will allow you to get into a property with as little as 3.5% down.

- Know that there are two real estate markets in LA: the competitive market and the non-competitive market. With a low-down-payment offer, you won't be able to succeed in the competitive market. Only offer on properties that have been listed for at least 10 days.

- Investing out-of-state is totally worthwhile so long as you find a way inexpensively in LA. Rent is so high here that it makes a ton of sense to house hack or do a live-in flip -- provided you have the funds to execute. If you don't, find an inexpensive living situation and invest out of state.

Hope these tips help!

Best,

Jon