New investor located near LA. What are your criteria for determining a good deal?

[Jack Budd]

Hi everyone, my name is Jack and I am trying to take actionable steps to enter the world of real estate investing. I am located in Whittier, CA, a few miles east of LA. I am interested in flipping and buy and hold/brrrr properties. I was reading David Green's book "Brrr investing" and he mentioned his three critirea for analyzing a deal: positive cash flow, buying for 70% arv, and located in a headache free area. My question for other SoCal investors is what are your criteria for determining a good deal? Are you finding deals that cash flow locally? With property values and interest rates so high, it seems really hard to find anything that won't produce negative cash flow. I am also trying to gain experience in running numbers and analyzing deals. If anyone has closed on any deals lately and would be ok sharing their numbers it would be extremely helpful to look at. Please feel free to reach out and connect!

[Noah Laker]

What's up Jack, I'm a broker and investor up in Sacramento, and I manage 100+ STR / MTR properties as well as a few LTR.

Unfortunately LA (as well as the Bay Area) are pretty much impossible to cashflow. These markets are owned by a lot of institutional investors and are more about appreciation than cashflow, so unless you find a needle in the haystack, it's just not realistic in this market IMO. Sacramento and other medium-sized metros are perfect because you can take advantage of the same longterm growth, but purchase prices are still reasonable enough to make the numbers pencil out. 

In short, I'd recommend checking out other areas if cashflow is your priority. We do some BRRRRs up here and the sales market is still strong enough for flips.