My findings after analyzing 123 properties in Los Angeles, CA

[Jonathan Lancaster]

I wanted to share what cashflow looks like in a high appreciation area like Los Angeles, CA. In the video below I showcase what the calculations of 123 properties look like in a gentrified area such as Inglewood, CA. What are your thoughts on investing in a high appreciation/low cash flow area vs a high cash flow/low appreciation area?

Check out my 3min video below to see the calculations and let me know your thoughts.

https://www.youtube.com/watch?v=AP_DJSXoJ6g

These are the global values used in all my calculations:

• Interest rate: 4%
• Downpayment: 20%
• Vacancy Percent: 3%
• Repairs Percent: 3%
• CapEx: 10%
• Property Management: 10%
• Loan Term: 30yrs

[Lee Ripma]

@Jonathan Lancaster

So you're looking at SFH in LA, buying as is, assuming no forced appreciation. Just plunking down 20% and getting negative cash flow. Here are my thoughts in no particular order:

1. 95 % of properties are not deals, it’s the job of an RE investor to find/make deals

2. RE is more dynamic and complex than you’re making it out to be with these simple inputs.

3. Cash flow is not where the returns are in RE. It's a hedge that makes it so you don't lose your property. It's not a very large percentage of your ROI, especially in LA. Look up and understand the 4 wealth generators of RE. You're looking at one of them, at this point in time, not looking into the future. You're really missing a nuanced understanding of investing with this little video.

4. People usually buy SFH to live in. They are not necessarily some great investment, they are a place to live.