All Forum Posts by: Jama Mohamed

Thank you all for the feedback and advice!

@Michael Totman Thank you for the honest comment. I completely agree with you that I really need to understand the playing field better. Before going for the bank, I did have some rough estimates and ideas of what I could afford, but I wasn't sure of some of the specifics and wanted a better idea. I've started looking at areas further out, but the situation still looks pretty unfavorable.

@Nicole C. I did think about house-hacking, but it's weird because it still looks like a lot of the deals listed are bad even assuming I were able to rent out rooms. Even if it would give me 5% total ROI, that is not worth it considering I could just invest in something else.

Hi all,

So I'm starting to get into real estate investing and have come across a problem that I'm sure many of you have had. Basically, whether to buy a house to live in and rent rooms out of or to buy a property somewhere and rent the entire thing out while living somewhere else. Here are some details-

I currently live in Los Angeles, California (Pasadena area) and am renting an apartment. I like the area and would love to own a home around here, but as you know the costs can be prohibitively high. I was so excited about the prospect of getting a house here and living in the area that I decided to go get approved for a bank loan and ended up figuring out that I can afford something in the $700k range with is barely enough to get something decent here. Since then I've been looking at deals with my real estate agent and have figured something odd out...

The cash ROI here is AWFUL, and by awful I mean negative negative negative. A 2 bedroom, 2 bathroom house might go for around $650k or so here and the average rents are around $1k/room or $2.2k for the full house. Doing the math and best case I'm down $1.5k/month with losses for the next 10 years (WOW). Total ROI is not positive either for that kind of deal!

So I'm just thinking, holy **** this is awful. Why would anybody buy a house around here? Am I missing something?

So now I'm starting to wonder, should I approach this from a different angle and instead buy an out of state property in a place that actually cashflows with renters. I really do want to buy/live in a house, but I'm not going to make a decision based on what looks shiny to me at the moment. And unfortunately buying a house here just looks like that kind of shiny stone...

Does anybody have experience with this or pointers you could give me? I'm really trying to figure all of this out! Thank you!

@Michelle Mapp

Thank you for the welcome! If it's tonight, I'll try to make it to check it out despite being horribly shy. I appreciate the pointer! :)

Thank you both for your warm welcomes!

Hi all!

I have lived in the Pasadena area for the past 7 years after initially coming here to study at Caltech. It's been a few years since I've graduated, but I love Pasadena so much because of all the business and technology growth that's happening in the area. I recently decided to go out and buy a house for myself, but thought that I should approach it from an investment standpoint as well. A few google searches and 3 clicks later,... and now I'm here!

Anyhow, just saying hi and I'd love to learn more about this exciting field :)

-Jama

Hi all!

I'm new here and this might seem like a newbie question, but I'll shoot anyways.

Right now I'm looking for a SFH in the Pasadena/Arcadia area for my first real estate purchase. The problem I'm having here is that no matter how I look at it, there's a really big disparity between the rent in the area and the monthly costs which always seems to end up in negative cash flow. For a $700k 3 room SFH I'm ballparking $3000-$3500 monthly costs. But the rents I'm seeing are more in the $2500-$3000 range.

Not sure if anybody here is well versed with deals in this area, but am I looking at things the wrong way?