All Forum Posts by: Bryan Igboke

@Arsen Atanasovski

Hahaha I just wanted to make sure! I've read so many horror stories about renting in historically "bad" neighborhoods and the books I've read are pretty cautious about them too. I figure this is the same risk that you would have in a "good" neighborhood though if you screen tenants incorrectly. 

Easily one of my favorite movies so I've definitely heard of 8 mile and Eminem. I would agree that you are arguably in a tougher area than me lol. 

Yeah prices are pretty ridiculous out here and this is one of the cheapest areas. To cashflow most investors turn to renting by the room and that's what I'll do too since individual room rents are pretty high as well. I work a full-time W2 job as well so I can cover PITI worst case scenario.

Believe it or not the market in Compton is pretty hot right now. I can barely even get done analyzing a property and emailing my agent before multiple offers over asking price are already made. Probably because of the low interest rates, but people around here seem to believe in the area. I'll definitely try to reach out to some investors in the area and see what they say. Thank you!

@Rob Gillespie

Hahaha I knew the jokes were going to come in so I figured I'd try to get ahead of them.

That's really good to hear! I'm seriously considering investing there so the reassurance from seasoned investors in tough areas really helps.

I completely agree with you on the Compton home prices being high, but the crazy thing is that they have some of the lowest (if not the lowest) home prices in southern California where I live. I've found that renting by the room gives them the ability to cashflow if you buy right.

I'll definitely stay focused and your response has pushed me one step closer to being confident investing here. Thank you for the response!

Bryan  

Hello BiggerPockets,

I am a new investor currently looking to buy my first home to use as a house hack rental property. 

Many of the properties that come up near the area I want to invest are in Compton, California. You may have heard of this city from the popular movie "Straight Outta Compton" or because of the rap group NWA. You have also probably heard nothing but bad things about this city ranging from constant property damage to gang violence. 

I don't believe this city to be this bad and think there are areas worth investing in, as in any other city. I believe it has been heavily stigmatized by pop culture and major events that happened 20 to 30 years ago. I have found homes that meet all of my investment criteria other than the fact that they are located in Compton.

My question is if there are any investors who own properties in Compton? If so, what has your experience been like with the area and the caliber of tenants? If you own properties in cities other than Compton that are seen as "bad" I would love to hear about that experience as well.

Thank you!

Hi @Kyle Spearin, doing that comparison is something I would definitely look into. My only concern with using the average costs to cover the utility is that they would vastly exceed this average cost and have me paying out of pocket every month. I've seen many posts talk about how tenants tend to be less conservative with utilities when they know it's someone else's responsibility to pay it, so this is the reason I shy away from that method. I will still look into it more though. Thanks for the response!

Hello BiggerPockets Family!

I am a new real estate investor in California looking to do my first deal in the next year. My goal is to househack a single family home by finding one with a guest house and living in that while the tenants I rent to stay in the main house. I'm doing this to replace the traditional househack strategy of buying a multifamily home because those are far more expensive and I want to move out of my parents house as quickly as possible. The analysis process has gone smoothly so far, but I hit a snag when it comes to utilities. If I were buying a multifamily I would just make sure every unit was individually metered and be done with it, but with a single family this obviously can't be done. Additionally I am planning on renting by the room to individual people and not one family in order to maximize cashflow. My plan is to sub meter the guest house I stay in so my utilities are all separate from theirs and have them get all utilities that don't place a lien on the home in their name. The utilities that can place a lien on the home will be in my name (just in case they don't pay) and I will simply forward the bill to them to split evenly. I've read many past posts that expose flaws with this method that I am hoping to negate by getting great tenants, but I was hoping someone from the community had a different/better method just in case this does not work. Please let me know what you think!