SoCal market – Good areas for small multifamily MTRs?

Question

Hey all!

Looking to invest in a small multifamily in Southern California within the next year or two. Currently in central Ohio, but my girlfriend is from CA and has family in Santa Clarita & San Clemente. I'm looking to purchase an owner-occupied property here with a private investor and self-manage it. Definitely plan for this area/property to be MTR friendly. What are some thoughts on these two areas / any others worth looking into for Small Multifamily MTRs?

Any advice helps! Thanks in advance.

Kenneth Donaghy · Answer

@Trenton Brown I agree with a lot of the feedback you have already received, those two areas are completely different. I tell a lot of my relocation clients looking to househack, and chose an area to live at the same time. Let's start with your budget, then within that budget, we can look into what neighborhoods are best. And BTW, according to Furnish Finder, San Diego is the most search city for MTR's, and has the most MTR's.

Twana Rasoul · Answer

@Trenton Brown Location is very important if you want to consistently have your MTRs filled all year round, I have a few MTS in San Diego that are pretty much have 100% occupancy that last 2 years I've had them. Mine are in central San Diego so you'd do well here, but can't speak to Santa Clarita or San Clemente....its important to work with people there that are heavily involved in the market who do a high volume of transactions and ideally are investors themselves with LTR, MTR, STR...whatever you are looking to do.

Matt Greer · Answer

I have family and a couple of connections that invest in that area between Santa Clarita, Los Angeles and San Diego. They have have a ton of success with multi family, ADU's and affordable housing. MTRs do alright. I'd definitely consider mixing a few of the options up. For example make one unit affordable to lower taxes or getting a property where you can add ADUs. I have some real experts in the area I could reach out to that could give better insights, because Southern California has a different laws than anywhere else and there is definitely a way to play the game there. An average agent in SoCal will help you get a return but a real estate pro that works all the various SoCal laws and local regulations in your favor will make you much more. It's an area I'd like to invest more in, but I won't do it without the right time so make sure you get a good referral or really vet your agent hard. SoCal is definitely part of the big leagues when it comes to anything multifamily.

Dan Portka · Answer

@Trenton Brown You're not going to find any small multi families in Santa Clarita. Its primarily a SFR city. If you're looking north of LA then perhaps areas around Van Nuys or North Hollywood would have more availability of small multis. San Clemente is a beautiful area but different market than Santa Clarita, its coastal and property values are higher. For 2-4 units you're looking at properties between $1.5M and $2.5M. Its located about half way between LA and San Diego.LA county is huge and many areas are good for small multi's and even MTRs. It just depends on what you're looking for. I'd recommend dialing into what your specific investing and living goals (assuming you're looking to house hack) and what exactly you're looking for (fixer/turnkey, duplex/triplex/quad, price range, etc).

Peter Mckernan · Answer

San Clemente, that will be a good area for LTR.. Not as good for MTR due to a lot of people looking at it will be those travel professionals. I would look at North OC (Costa Mesa, Fullerton, Brea, Tustin, etc.) these areas have more nurses etc. to get the MTR income up. There are some people that are in that area that jump on board of the MTR, in the summer but will be a little lighter in the winter down that far south. There are other areas that are good too, but can talk in length when you are dialing in your parameters a little more.

Angelo George · Answer

Understandably so! Shoot me a DM. Let's stay connected. I have a network in SoCal and I'd be happy to help you find that property.

Trenton Brown · Answer

Hey Angelo, definitely would not be interested in anything ground up (at least for the near future)...looking for something with minimal work/turnkey. Thanks for the reply!

Angelo George · Answer

What are your thoughts on developing the rental ground up? I have a buddy selling a property in LA (East Hollywood area) where you can develop 5-6 units.