Trying to figure out So Cal market. Is this the norm?

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Tanner Marsey · Answer

ca is a whole different ball game. Especially on the coast or anywhere near it. It’s a long play, appreciation, rent increase type deal. Yes, it’s pricey to get in the game but the long term pay offs can be well worth it. You’re lucky to break even on a property here from the get go. I haven’t been a renter here for quite a few years but when I was.... I expected my rent to go up 100 bucks a year. Minimum.

You will eventually achieve cash flow and appreciation will do its thing, too. Over time.

Also, investing an hour or more away from the coast is, in my opinion, a waste of time and money. You pretty much get none of the rewards of investing by the coast but all the negatives that come along with Ca investing.

Good luck!

Burke Ericson · Answer

@Burke Ericson

Also, consider that rent control may become statewide and expanded the SFRs. The laws are ridiculously biased against landlords and you can expect to eat it bad if you have to do an eviction.

Sam Dennis · Answer

Thanks @Anthony Dooley. I’m starting to see the disadvantages of the current California market. High priced property and low rents. I know counting on appreciation isn’t always a good idea, but I have to think that the property values in the eastern outskirts will be going up drastically as the years go on. It’s just always been that way here, a big concentric circle of people moving out from Los Angeles.

I’m also fortunate in that I’m a relatively short distance to other, maybe better markets.  Utah, Navada, Arizona; all six hour and under drives. I’ll be looking to branch out as my knowledge level rises.

I appreciate the insight. Let me know if there is anything out this way you need help with!

Cornelius Charles · Answer

@Burke Ericson My guess would be that your observations are too simple.  Maybe those properties were overpriced to begin with.  That's what we see up here in Ventura County. If you price your home in line with the comps, your house will sell pretty fast.  I run a monthly report from the data that my wife pulls from the MLS, and the median price in Ventura County for July was up 1.4% from the previous month and up 3.9% from last year.

Sam Dennis · Answer

@Dan Heuschele

That is the question!  Thanks for the readjustments, I will rerun with those changes and have a look. Understanding all the different loan options and how to manipulate them to the best benefit is defiantly something I need to understand better. I don’t have much experience with it so its a learning curve. Might even be worth taking a class in if I can find one.

Thanks again!  Let me know if there is something I can help with.

Sam D.

Sam Dennis · Answer

@Jose Gonzalez

That’s great Jose. It’s good to hear BRRRR success stories in California!  Are your rentals all in Central California?  I’ve heard a lot about Airbnb but assumed the property location would have to be in a “vacation type” area. Is there a market for people in suburb areas?  I am very close to Ontario International Airport.  In my driving around i’ve seen a few two and four unit properties like your describing in my area. I like the sound of that plan!

Thanks for the info, let me know if you need help with anything down here!

Sam D.

Jose Gonzalez · Answer

@Sam Dennis

I been a landlord in CA since 2000, now have several rental.  Yes you can still make money CA, what I have done in the past to  purchase highly discounted properties is use cash to buy it, rehab, rent it, then refinance to get cash out, the last part is easier after 6 months from purchase date. If you are using a property management company make sure to tell what kind of tenant you want (FICO, income to rent ratio, section 8[I don't recommend],prior evictions, criminal history[sex offenders], marijuana on property)

If your unit is a studio or 1 bedroom you can a lot more money wit Airbnb, most markets now have Airbnb property management that handles all turn-over things such as cleaning,  dealing with guest, we use and August Smart lock that sincs with Airbnb so you can see on when they come and leave plus a security camera outside the unit to make sure there is no extra people or a party going at my unit so far we are making more than double from what we use to make on it with a regular tenant.

My goal now is buy houses with 2 units on same lot where front tenant pays all my bills and possibly make a little extra but make 2nd unit an Airbnb unit.

Burke Ericson · Answer

@Sam Dennis

It sounds silly but I have many properties I like on Zillow and in the last few months I notice that the majority are having their prices lowered in various CA markets. That indicates to me that the market is changing. It’s simple but I think there is merit to it.

Sam Dennis · Answer

That’s awesome @Burke Ericson. I’ve set a goal of doing my first deal by second quarter 2020 so hopefully they will keep falling. Out of curiosity where do you get your info on the real estate market trends?

Trying to figure out So Cal market. Is this the norm?

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