All Forum Posts by: Wei Li

@Dustin Cook: I'm actually looking at both: using a realtor and looking at MLS, as well as turnkey. Trying to be very conservative in my estimates and thus not getting anything that makes sense number-wise. Definitely planning on flying out to visit any property before we buy. Do you typically make offers and then fly out though? Thinking that it might be too late if you wait to fly out in today's market.

@David Faulkner: Looks like you've got a good thing going in Phoenix, although I have to ask how you manage to self-manage at a distance?  With the capital I have now, it's very difficult to find anything in LA, and I'm apprehensive about investing out of state for all the reasons you've mentioned.  Do you think a good way to start local would be partnering with others to start?

@Matthew Schroeder: Sure, that's what I'm hoping bigger pockets will help me connect with those much smarter than me:)

Hi Minh,

Your story is very inspiring. My hope is that I can follow in your path one day and achieve the freedom you described in your story.  Happy anniversary and congrats on your journey!

Thanks for the replies! Very helpful to think through these things, especially on the turnkey idea. It seems PMs are the key for out of state investing as they can really make or break the investment

Hi everyone,

Looking to pick the brains of LA investors with experience buying rentals out of state.  Let me buy you lunch/coffee so I can learn from those who have gone through the gauntlet before.

About me:

• Recent homeowner with full-time job in the Valley
• Looking to buy first time rental property sometime late this year/early next year
• Mainly looking for passive cashflow, to supplement income

My questions include:

• What markets did you invest in and why?
• Did you buy turnkey? Why or why not?
• How do you find your deals?
• Best way of financing?
• How did you find a good property manager?
• What are the difficulties in managing long distance?
• Recommendations on PMs, lenders, etc.

Please send me a PM if you're in the LA area and willing to help a new investor out! Thanks in advance!

Originally posted by @Logan Allec:

@Wei Li "I've thought about house hacking, but haven't looked at the numbers yet; I imagine it should be much more profitable than a single home."

You've got that right, brother. And it certainly is possible in LA. I recently picked up a fourplex in Santa Clarita using 3.5%-down FHA financing, and it cash flows.

One thing to keep in mind when looking for an FHA owner-occupied triplex or fourplex is that 85% of the market rents on all the units need to cover your monthly payment (principal, interest, taxes, insurance, and mortgage insurance). This is known as the self-sufficiency rule. It only applies to 3- and 4-unit properties (not SFRs or duplex) bought using FHA financing. I put together a spreadsheet here to help potential house hackers quickly analyze whether or not a property qualifies. There are other FHA requirements concerning which you should contact your local lender, but determining whether or not a triplex or fourplex meets the self-sufficiency rule is a good place to start as this rule will immediately eliminate many properties from your search, especially in expensive markets like ours.

Thanks Logan! Would love to chat about your 4-plex purchase and your experience with it. If the numbers make sense, I'm definitely open to it, although our family, having just started, is a little risk averse and not sure if jumping into managing a fourplex would be too much at once. Definitely interested in those low down payment FHA mortgages though (seems the only way to go actually in LA).

Hi Eric!

I'm looking in the Valley, around the Woodland Hills area.  I've thought about house hacking, but haven't looked at the numbers yet; I imagine it should be much more profitable than a single home. However, having a family does make me a bit wary being that close to tenants; would love if others who have done it with a family have any experiences to share.

Hi BP! Just started learning about real estate investing and getting interested in it through listening to the BP podcast and reading. Still very new but interested in taking the plunge soon, as I'm planning on buying a family house this year, and the goal of purchasing at least one rental property the next. I firmly believe in being well-educated when making these large decisions.

I've lived in LA for the last 10 years and love it.  Grew up in the Columbus area and am interested in perhaps investing there in the future as well.  Really enjoy the weather and lifestyle (hate the traffic), and am a little apprehensive by the really high prices for houses in the area.  Play basketball for fun and consulting for a pharmaceutical company for work. My goal and reason for real estate investing is to be able to have passive income to support my family (have a 1 year old, and possibly more on the way) and be able to spend more time with them.  

Look forward to networking with others and learning and contributing in the future!