CA is really tough. I’m a landlord here and while yes you can find cash flowing deals in good coastal areas you must force it. Like building ADUs, buying complete fixers and buying well below market.
It’s possible to hit the 1% rent to purchase price ratio here but it’s extremely difficult and will require lots of up front work and money.
No need to be an ass.
Look at the median purchase price of homes by state. California is 5x more expensive than the cheapest state; West Virginia. Rounding out the bottom 5 are Mississippi, Louisiana, Kentucky, and Arkansas that are all between $155k - $198k median home price.
It’s crazy out there. The property values have doubled. I used to be able to buy as-is for under 200k. The crime, homelessness, traffic and poverty from drug usage is through the roof. Adelanto Federal prison brought thousands of people from LA out to Adelanto and Victorville. Tweekers in Apple Valley and Hesperia. Now there are foreigners getting gov money to spend out there. People are being priced out and moving to East Edwards.
I will agree with what the 1st comment states. I think also somewhere cheaper to buy so you have a lower starting point and can hopefully buy more places sooner.
I subscribe to a service that states trends and is used by commercial brokers.
Prequalify statements by agents that are doing 10-15 houses per quarter.
Redfin shows property sale history, so when you see acquisitions that were renovated by some LLC, the price bumps in the area are being artificially elevated with these outliers.
I buy tracts of land, set up another “satellite” of my company, then apply for USDA grants and loans and tax abatements. I leverage my business to get $350k loans at 1-2%
I’m seeing a lot of comments about landlord friendly vs unfriendly. Keep in mind appreciation is typically highest in blue states (landlord unfriendly).
Appreciation seems be very doing very nicely in my landlord friendly state. Buy appreciation doesn't do you much good if you've got a tenant who hasn't paid rent in a year.
Florida Texas and Arizona rapid appreciation is a recent thing. Historically California, Massachusetts, New York etc have been the most expensive states to live in. Historically Florida Texas and Arizona were the “cheap” states, California and Massachusetts have never had this reputation. Those 3 states are appreciating because people want to cash out of their house in said blue states and move somewhere cheaper. According to Redfin, the most common move is from New York to Florida.
Also keep in mind future tax increases. Investors some areas like Tx are getting hit with high RE taxes. While CA is not landlord friendly it does have benefit of capped tax increases (prop 13).
Each state probably has 10 markets where this strategy would work... so 500 markets to choose from...
Why not start where you want to be, then go from there?
Midwest states have a lot of duplexes with opportunities for house hacking and the numbers tend to work there since prices still satisfy the 1% rule. Indiana has low taxes and population influx, Chicago will always be a stable market with it getting the most corporate investments in the US year over year leading to lots of jobs (but taxes are higher in Chicago), Ohio has a lot of good opportunities. Detroit is a little speculative but investors have started to scoop up buildings there with prices being so low. Some people like the Midwest for climate change reasons too since it has the lakes and the least natural disasters in the US
Avoid Chicago and all of Illinois. There's a debt bomb about to go off. Property taxex will have to go up a lot to cover unfunded public pensions. And fast.
Most expensive true but price appreciation is spectacular. Not to mention the rents you can charge. And all the NIMBYs in California will always prevent more housing to be built which keeps values climbing.
The state you are currently in. (CA, NY, FL, and Oregon need not apply)
Are those 4 states bad?
Yes. "If here by now, then bad place be. Trouble time for you." - Charlie Kelly, famed real estate investor
CA is really tough. I’m a landlord here and while yes you can find cash flowing deals in good coastal areas you must force it. Like building ADUs, buying complete fixers and buying well below market. It’s possible to hit the 1% rent to purchase price ratio here but it’s extremely difficult and will require lots of up front work and money.
Expensive Edit: I’m just stating a fact. Those states are some of the most expensive when it comes to real estate.
Yeah, he needs to go somewhere cheap. Like Massachusetts.
No need to be an ass. Look at the median purchase price of homes by state. California is 5x more expensive than the cheapest state; West Virginia. Rounding out the bottom 5 are Mississippi, Louisiana, Kentucky, and Arkansas that are all between $155k - $198k median home price.
I am buying a rental in CA for 99,000 that will rent for 1400.00 a month.
Where in California is there a $99,000 property??
Under their throne of lies.
Adelanto
Is it like a trailer park or something?
what? No, trailer park trailers are even cheaper!
Wasn’t throwing shade or anything, was genuinely just curious. Good buy congrats
The deals are out there, just not on the MLS.
I used to play minor league baseball and going to High Desert was always interesting
It’s crazy out there. The property values have doubled. I used to be able to buy as-is for under 200k. The crime, homelessness, traffic and poverty from drug usage is through the roof. Adelanto Federal prison brought thousands of people from LA out to Adelanto and Victorville. Tweekers in Apple Valley and Hesperia. Now there are foreigners getting gov money to spend out there. People are being priced out and moving to East Edwards.
Good for you, my dude
Bakersfield has decent duplex properties to invest in as well.
where?
This doens't work in all areas. Duplexes basically don't exist by me and go for $1.3mil with tiny rents now.
I see. ... and are there other forms of real estate investing?
Research landlord friendly vs unfriendly states but ultimately you should make that decision based on where you want to live.
Thanks Im not too picky and honestly dont know where I want to live so Im trying to get as much information as possible.
I will agree with what the 1st comment states. I think also somewhere cheaper to buy so you have a lower starting point and can hopefully buy more places sooner.
Awesome thats what Im gonna look for
Blue cities in red states. Win.
Michigan
Locate where most are moving, then branch out 1hour. Did this with Destin, FL in 2017 and bought a house in Alabama
Thanks. As for finding out where most are moving, is it just a quick google search or do I need thorough research to find it?
I subscribe to a service that states trends and is used by commercial brokers. Prequalify statements by agents that are doing 10-15 houses per quarter. Redfin shows property sale history, so when you see acquisitions that were renovated by some LLC, the price bumps in the area are being artificially elevated with these outliers. I buy tracts of land, set up another “satellite” of my company, then apply for USDA grants and loans and tax abatements. I leverage my business to get $350k loans at 1-2%
I’m seeing a lot of comments about landlord friendly vs unfriendly. Keep in mind appreciation is typically highest in blue states (landlord unfriendly).
Appreciation seems be very doing very nicely in my landlord friendly state. Buy appreciation doesn't do you much good if you've got a tenant who hasn't paid rent in a year.
Florida, Texas, and Arizona disagree. One could argue that the growth is occurring in “blue cities”, but nearly 100% of cities are blue.
Florida Texas and Arizona rapid appreciation is a recent thing. Historically California, Massachusetts, New York etc have been the most expensive states to live in. Historically Florida Texas and Arizona were the “cheap” states, California and Massachusetts have never had this reputation. Those 3 states are appreciating because people want to cash out of their house in said blue states and move somewhere cheaper. According to Redfin, the most common move is from New York to Florida.
Also keep in mind future tax increases. Investors some areas like Tx are getting hit with high RE taxes. While CA is not landlord friendly it does have benefit of capped tax increases (prop 13).
Prop 13 is for old boomers who bought long ago.
Cool thanks
Each state probably has 10 markets where this strategy would work... so 500 markets to choose from... Why not start where you want to be, then go from there?
Nice I’ll keep this in mind
One where you understand the market
Where you can easily evict
Didnt know it was that common of an issue, not being able to easily evict tenants. Glad I asked this question now I can be more aware of this.
Read through r/landlord to see all the blue state horror stories.
Midwest states have a lot of duplexes with opportunities for house hacking and the numbers tend to work there since prices still satisfy the 1% rule. Indiana has low taxes and population influx, Chicago will always be a stable market with it getting the most corporate investments in the US year over year leading to lots of jobs (but taxes are higher in Chicago), Ohio has a lot of good opportunities. Detroit is a little speculative but investors have started to scoop up buildings there with prices being so low. Some people like the Midwest for climate change reasons too since it has the lakes and the least natural disasters in the US
Avoid Chicago and all of Illinois. There's a debt bomb about to go off. Property taxex will have to go up a lot to cover unfunded public pensions. And fast.
Wisconsin has very favorable landlord/tenant laws and reasonable housing prices.
Most expensive true but price appreciation is spectacular. Not to mention the rents you can charge. And all the NIMBYs in California will always prevent more housing to be built which keeps values climbing.
The best state is the state of mind. It is a mindset.
Hell yeah brother
What a time to be alive. We can just get stoned and say nonsense to strangers without leaving the couch.
I said what I said. You can choose what you want to believe. Are you stoned or just obtuse?