4 unit building in Long Beach, Ca

[Diane Kusicki]

Hi everyone- I'm a first time home buyer. I've been educating myself on real estate investing the past year. I'm a mortgage underwriter and I've seen how people make money in real estate and I want in. I've been shopping for months, looking at properties using the calculators but not sure if my calculations are accurate all the time since I've never had hands on experience before. I found a four unit property that I can't decide if it's a good deal or not. I live in Southern California where house values are much higher than most of the country. Here are the specifics (below)- please anyone who's had experience in the socal market can you advice if this is a good deal or not? Price : 685,000 Financing: FHA I'm putting 3.5 down and living in one unit. The other three are currently rented Unit 1: 1 bedroom 1 bath $1100 Unit 2: 2 bedroom 1 bath $1300 Unit 3: 1 bedroom 1 bath $1050 Unit 4 : vacant- I would live in it Per the mls total annual operating expenses $10,729 plus a high mortgage payment. It's an older property built in 1923- some sloping in one of the rooms and needs some work but I estimated per unit about 12k in work. I would do the unit I'm living in first then I would upgrade the others in time. I would be negative cash flow for a while because I'm putting so little down but figured over time it would be a source of income? After a year I plan to move out and rent the 4th unit. Another concern is it's 45 min from work and with traffic that's further. What are your thoughts? Also in a place like Southern California multi units are harder to find unless is Long Beach or LA but I live in Irvine and it's mostly Sfr and condo/town homes... I have an SfR in Irvine that I could buy as well that's a steal of a deal in the market - would buying that and either selling or renting after a year be a good investment as well? I'm just scratching my head on my next move here... I'm leaning more towards the SfR which is 5 min from work and a much better more desirable area than the Long Beach four plex and cheaper listing price but I wouldn't have any rental income coming in- I could afford it though. Don't know what to do....