Cash flow California investors

[Nick Meyer]

Hi there,

My name is Nick and I’m 22 looking to begin my real estate investing journey. I live in northern California, however still want to find a great property that cash flows and not rely on appreciation.

Where are my fellow Californians investing? I would love to hear some thoughts!

At the very least— name a city where you have a property and I’ll be sure to check it out.

Thanks for all your help in Advance!

[Dan H.]

I live in San Diego and I invest in San Diego area. You may think it does not cash flow but I know of zero investors who have owned for at least 5 years that do not have significant cash flow. San Diego historically has produced near top of nation ROI for buy and hold investors. How?

1. The item you do not want to rely on, appreciation. Market and rent appreciation. San Diego's long-term appreciation goes back more than 60 years. When market prices rise, rents increase (usually with a time lag). SFR rents have been rising at a rate greater than $100/month annually for at least the last 4 years.
2. They are investors. They do not typically purchase an SFR at retail. They either buy MF or below retail. If you are purchasing for an investment, why pay retail? Does the store you purchase you groceries at pay retail? Investors are purchasing for an investment and should only consider retail if there is a value add or something else special about the purchase.

My suggestion is you start your RE investing local in Northern CA.  The prices reflect the value.  The value takes into account the risk as well as the expected return.  There is a reason the cheap locations are cheap.

Good luck