All Forum Posts by: Enrique Huerta

@Codi Clausen

My take is that despite the high pricing, with enough money down, you should have sufficient margin to at a minimum break-even on your "investment." I put investment in quotes because ideally, you'd cash flow, but OC is more of an appreciation-driven market.

The real question is:

-What are your goals as it pertains to this "House hack?"

-Do you want to house hack because you're paying rent and would prefer to 1. have your own home, and 2. not pay as much with the assistance of a room-mate? Or is your situation different?

My thoughts are that you're paying rent anyway. If you have cash savings that are not earning anything beyond 1.0% interest, you can buy a good piece of real estate and essentially live for "free" by paying your share of the housing payment and having a roommate or two to pay the rest of it. 

The reality is that there is a ZERO shortage of people looking for a good, affordable place to live, especially in the OC.

So, 

1. Get approved for financing by a lender to see what you can buy and what your monthly payment looks like

2. Scope out neighborhoods within your target price range and research rents, schools, safety, etc. anything that is relevant to you

3. Run the #s to see if the rent per room in the target neighborhood would allow you to live "for free" in your new house-hack.

Hi @Pramod Yash ,

My OC base is Irvine. Congrats on your decision to pursue financial independence. You'll find that many of us here are on the same journey. Some starting, some on the road, and some at the destination with further expansion in mind.

A's to your Q's below:

What are your thoughts on the current environment in OC?

My thoughts on the OC market, in general (general because each city and neighborhood varies), are as follows:

-Inventory is slightly increasing, but not by much.

-Prices are still increasing overall, despite the abundance of "price reductions." My thoughts are that the price reductions are driven by a "come to reality" moment for property sellers versus a true decline in the market or a "bubble bursting."

-Interest rates, tax policy, aggressive pricing, slow wage growth are all causing some uncertainty in the market, but people will always buy. There's always a NEED for high-quality housing, so someone is always making a move.

-Long-term, the OC will remain a super desirable place to live due to the abundance of jobs, excellent schools, recreational activities, and high quality of life. The traffic is less than LA, the airports are close, the beaches are incredible, and the people are very nice!

 Prices seem too high. Do you think this is the right time for a newbie to get started or should I wait?

The time is always now. With the appropriate education, you can start today and partner up with people that do what you're looking to do. If you're looking to be a long-term, buy-and-hold investor, pricing is (somewhat) irrelevant. With the appropriate capital stack, you can buy a property without being overleveraged and still achieve some cash flow. 

If you are in OC, where (city) are you looking for deals?

To be honest, I'm a shorter term investor, so I'm looking for investment opportunities in pockets of LA County and the Inland Empire. The deals you would look for are driven by your capital to start investing, your time horizon, and your goals for returns. The question is what returns are you looking for? Where would you like to buy? What are your goals?

Let me know if you have any further questions and welcome! 

Depends on hold period. 

Short Term (1-2 Years)

20%+ IRR

1.3x-1.5x+ EM

Med Term (3-5 Years)

18%-20%+ IRR

1.8x-2.2x+ EM

Long-Term (5+ Years)

>9% COC

 What he said ^^^

Welcome @Brandon Duff .

It seem that we are neighbors. Obviously you know that you have a lot to learn, but if you ever have any questions, feel free to contact me. I have experience in some of the areas that you mentioned AND I know a good friend (also lives in Irvine) who does a lot of investments in Tennessee. Perhaps an introduction is in order...?

Either way you will be learning a ton here and just remember that what separates the "investors" from the INVESTORS is execution. At one point I was a PT & Nutrition coach and then got into real estate. It's totally possible! Now I need to focus on losing some weight again...lol

To your success,

E

Hi @Timothy Cervantes ,

MLS access is one benefit but you can easily get the MLS feed from any licensed salesperson who you trust.

The main benefits are what I mentioned: you learn the foundational knowledge of real estate (laws & regulations, history, etc.), you begin growing a network and tapping into your existing network, you gain awareness of how many parties are involved in a typical transaction, you gain knowledge of the standard contracts used in the majority of real estate transactions, you rapidly develop a sense of awareness regarding the real estate market in your area, and you start gaining the trust of your network and a track record of success with the transactions you facilitate and close. You also develop prospecting, marketing, and business development skills (if you stick to it and don't quite). The benefits are endless in my opinion. The transition to the investment side becomes much easier when you understand the basics of how real estate is bought and sold. Then all you have to do is target your niche and begin uncovering the nuances of that niche you want to target. The basics are the basics. 

Different people come from different backgrounds and will have different opinions. 

My take on the matter is what @Bill Gulley recommended:

-Read the real estate licensing textbooks that agents use to get licensed.

However, I would take it a step further and tell you to actually get licensed. It would be very beneficial to be an agent and get the experience of brokering transcations so you can become familiar with the overall process (what happens first, where clients typically come from, the various players involved, etc.) and not to mention, the network that you will build.

Many people will disagree with me but that is MY take on your question. And yes, I AM biased. Aren't we all?

Good luck!