All Forum Posts by: Grey Stone

It really depends what your goals are. Also, there's a few things I'm not really sure about. Do you have $66k specifically saved as a 20% down payment for a $330k home? This may be an issue because you will need to show the bank reserves and may need to cover closing costs and moving costs. Are you already preapproved for that amount? I always think it is most important to get preapproved and have a lender with your info ready to go, in case you find a deal and need to move quickly. And what is your current mortgage and rent? The AV was definitely hit HARD the last recession, but most recessions are not that bad. There is also strong demand, as many people are priced out of Los Angeles. If you pull money out of your home, do you feel confident it will cash flow, or at least carry itself if rents fall 20%? Rents sometimes rise during recessions, but I try to plan for the worst. Personally, I am choosing to keep enough equity in my properties so if I need to sell I won't feel trapped or need to write a check. However, if I came across an amazing deal that I could not afford, then I would absolutely pull money out. Fortunately, I'm making decent money to where we are able to buy rentals at a pace that feels good for me and the goals for my family. So, in a nutshell if your new mortgage will make your rental CF negative or too tight if we see a dip in rents, do not get a heloc. But if you get the heloc and it still CF well, I would get the heloc. Also, if you think prices will dip, it would be best to make your credit pristine and stack cash. Lending tightens during recessions, but banks always lend. 

I would offer looking into the AV. I find deals all the time with "good" cash flow. It also depends on where you are in your journey. If this is your first deal, I would strongly recommend buying a small multifamily while also living in one of the units and renting the others. 

 I must be inexperienced too, because I have met/worked with over 15 agents in my area and most offer very little value. I've used the top agents that have ads posted everywhere, to the little guys that swear they will work hard for us. It never seems to work out. Instead now, I use the listing agent and contact them directly. Oftentimes they offer a portion of their commission to make the offer more attractive. So yes, I may not be paying the agent directly, but the money is coming from the sale. I notice my offers get accepted quickly, with a credit and a smoother transaction. I already know my area and numbers very well, so I usually get no additional value from bringing another agent in. I love the idea of having an agent send me pocket listings, can give insight that I'm unaware of....but unfortunately, it's just not the case. I'd much rather be my own advocate.

It really depends on your goals and plans for the property. If you feel this property is in the path of growth and will appreciate much faster in that area, it could be a great deal. If you live out of town, this could be a great deal. Maybe you have stellar seller financing terms. Unfortunately, from what I read I don't think it is....atleast not for me. If you bought it to live in you can get away with putting only 3.5% down and move when you need something bigger. Also, the numbers seem kinda low. Section 8 pays above market rents to where it's kinda common to find houses on redfin that cash flow $500+ with a small down payment. It's great you started and should make some money, but if you're looking for cash flow I think the cheapest house with the most bedrooms is the best way to go. Even the nicer areas can cash flow well out here too. Good luck on your journey! The first step is always the hardest. 

Call bandit signs in the area you'd like invest. Ask if they are a wholesaler, let them know your criteria and budget and see if they can pass you deals.

I live and invest in the AV. When I first moved out here during the Great Recession, I could not believe how cheap these California homes were. I just knew there was something I was missing, so we waited on the sidelines and missed out on stellar deals, by not being aggressive and trusting our gut. I'm not too sure why people feel you can't cash flow in the AV. I feel that is the main benefit to the AV. I'm currently in escrow for a property with a 22% cash on cash return. It's a pretty basic home, not super fancy, and not super scary. The AV is great for newbies because down payment and overall costs will be much cheaper all while making great returns. I feel appreciation is much stronger in Los Angeles proper, even in the hood (when you buy right). We bought a beautiful West Palmdale home and enjoyed $100k in appreciation during the 2 years we lived there. In contrast, my SIL bought a house around the same time as us for $45k more, in the center of the hood (I was concerned about parking my car in her driveway) and she saw comps sell around $250-300k, while we only gained a fraction. I think to make money in the AV, you have to understand the economics of it. There are people that live here and earn excellent salaries, however most do not. Many live here because they couldn't afford LA, and/or do not make a ton of money. I've noticed the cheaper houses have much more appreciation and are easier to sell and rent. I'm focused on buying inexpensive properties in safe, mid to lower income areas. If you are a wholesaler, or know someone that is, send me a message. I am actively looking for deals. 

I invest in the AV and would like to meet with other like minded investors. I love wholesalers! If you have a deal for single family or small multifamily below $300k in Lancaster or Palmdale, send me a message.

I'm interested! I'm primarily focused in the Antelope Valley (Lancaster and Palmdale) area.