Is it better to invest in Irvine, San Francisco, Vegas, Johns Creek or the IE?

Where would you choose?

  • Irvine

    Votes: 25 64.1%
  • San Francisco

    Votes: 9 23.1%
  • Las Vegas

    Votes: 4 10.3%
  • Johns Creek

    Votes: 7 17.9%
  • Inland Empire

    Votes: 8 20.5%
  • Santa Ana

    Votes: 4 10.3%
  • Other

    Votes: 8 20.5%

  • Total voters
    39

irvinehomeowner

Well-known member
The answer to me is simple, if all stuff is equal (cash flow, investment amount, etc), I would invest in areas closest to me. I know the area and if things go sideways, I'm close by to attend to it.

You can choose up to 3 for you Trump/Homie/USC people out there.
 
My 2 cents on SF investments.

If looking to cash flow, or short term returns, not a good investment & you don't have a large down.

Looking at the long-term picture, SF real estate is one of the most in-demand real estate markets in the entire nation.

Some positive stats for you:

63% or more of households rent in SF.

Median home price in SF is 1,360,000

Californian's median home prices are 482,000

San Francisco is hindered by tight spaces. No room for development & strict limitations on new construction driving up real estate values.

Lots of tech jobs, and job growth with many tech giants living in SF.

Home prices in neighboring Marin County are higher than SF. (1st: Marin, 2nd: SF, 3rd: San Mateo, 4th: Santa Clara) -> can look into neighboring cities - many fixer uppers are available in the bay area for short-term flipping.

Potential to invest in fixer-upper homes and flip them before the bubble or turning a single family home into a multi-rental unit an opportunity.

Negatives:

Higher potential for bubble bursting if the market sways down.

Relies too much on the tech industry & jobs to keep prices/rents inflated. Tons of google execs live in the city, & many areas that were once less desirable have inflated significantly as a result of increased jobs & tech boom.

Cap rate are high (unless you put a hefty down payment, you won't be cash flow positive)

Only good for flipping or long-term holds.

*As always, investing is a risk no matter what & do your due diligence before investing in any property, in any location.*

On another note, Boulder, CO is a growing area, and real estate prices have soared in the last few years there. It's another area where a lot of techies are moving in from CA. I haven't researched the cap rates though, but would imagine they are not good cash flow.








 
I have two investment properties up north as you can recall from what I mentioned in the past.  A few rentals in Irvine/Tustin area in the past.

If we are comparing the same priced SFR homes then hands down I would invest up north.  No mello, no HOA for the homes up north unless you look at new development.  My 1800 sqft SFR up north rents out for $5,150 a month with no HOA/MR; the home is older but so far it's been trouble free.  This was purchased for $1.03. 

Just using this as a comparison; I recently purchased a SFR home in Irvine for $1.03.  HOA/MR combined alone is around $550 a month and recent comps have it renting out at $4,500. 

Yes the Irvine home is newer so "less" chances of stuff falling apart; however, with any rental you are at the mercy of how the tenants treat the home. 

One last thing to keep into consideration; when I had my broker list my home up north for lease, we had 27 applicants in the first 2 days.  All over qualified and most are corporate leases. 
 
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.
 
B2FiNiTY said:
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.

If you can't to the property within about an hour or so, you need someone else to manage it for you is my thought. 
 
What kind of experience can I expect by having someone else manage the property? I know... it's a very open and noob kind of Q but would like something to get my mind started on this earlier than later.

What about commercial properties? Process about the same? Thinking about getting into a warehouse for my biz and if things don't pan out or we need to upgrade, we can lease it out.
 
B2FiNiTY said:
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.

Very doable, hire a reputable property management company, but also equate the cost of that into your overall expenses.

I've never run into any issues & have very reputable property management companies handling everything.

My family also has properties all over including the Bay Area, Hawaii, Australia and so forth - they have everything fully managed now, & have never had issues with managing things even overseas.
 
Laguna21 said:
B2FiNiTY said:
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.

Very doable, hire a reputable property management company, but also equate the cost of that into your overall expenses.

I've never run into any issues & have very reputable property management companies handling everything.

My family also has properties all over including the Bay Area, Hawaii, Australia and so forth - they have everything fully managed now, & have never had issues with managing things even overseas.

Thanks for the assuring reply. Definitely makes me consider building/investing more into the real estate side of things.
 
irvinehomeowner said:
The answer to me is simple, if all stuff is equal (cash flow, investment amount, etc), I would invest in areas closest to me. I know the area and if things go sideways, I'm close by to attend to it.

You can choose up to 3 for you Trump/Homie/USC people out there.

Wait and see approach due to the current geopolitics in the Middle East. There might be a big time Showdown.
http://www.usatoday.com/story/news/...china-respond-trump-military-drills/97555758/
 
How easy/doable do you guys think an investment airbnb in Vegas is?
I just booked an airbnb for july 4th weekend for around $125/night, which got me thinking, how doable is this?  Home prices are still around $250k for a sfr. 

Principal interest around $950 at 4.25% at standard 25% down
property taxes at 1% = $210
figure in $100 hoa = $1300/month

Say you factor in just having it filled for 20/30 days at $125 (which is on the low end there)...$2500/month...take away $500 for the airbnb fees, take away maybe another $300 for cleaning. 

Does $400/month sound about right? or am i missing something?
 
Usually when there is a war then there is a recession. As consumers spend less and companies lay off. Also Capex budgets are slashed. (Therefore you might get a below market deal)

 
For $400/mo profit, I'd rather invest that money into other assets like stocks, closed end funds, mutual funds, etc
 
B2FiNiTY said:
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.

We own a property out of state and when there is an issue my husband still manages it out of state. he just has good contacts for repairs he may need to address and the tenant just communicates directly with him on issues. So it is doable to be hundreds of miles away and still manage it remotely - not having to pay a property management company. Granted we've had this tenant for quite awhile and she's reliable.

we've been wanting to purchase a property for airbnb/ VRBO in a place like palm springs but waiting for the next recession to see if we can get a good deal on a property before doing this. Anyone doing this with any of their properties? how's the cash flow?
 
For me, managing properties that are far away is not just the maintenance issue but for me a familiarity/experience issue so I know where is the best neighborhood to buy and what the pros/cons of the area are.

I think Homie has lived up north, so he has that knowledge but for me, I would only invest in Irvine because I know (well... as much as I can) all the different areas, what property types are more in demand, which schools service which homes, where the closest donut and KBBQ spot is, etc.

I only mention the IE once in a while because I have relatives that live there and the places I visit look nice (and are cheap) but I don't really know how safe it is, what the quality of schools are and if icicle guns are popular.
 
Paris said:
B2FiNiTY said:
How manageable is it to have properties where you don't live? Perhaps hundreds of miles away.

We own a property out of state and when there is an issue my husband still manages it out of state. he just has good contacts for repairs he may need to address and the tenant just communicates directly with him on issues. So it is doable to be hundreds of miles away and still manage it remotely - not having to pay a property management company. Granted we've had this tenant for quite awhile and she's reliable.

we've been wanting to purchase a property for airbnb/ VRBO in a place like palm springs but waiting for the next recession to see if we can get a good deal on a property before doing this. Anyone doing this with any of their properties? how's the cash flow?

@Paris: you guys are very lucky that you have such a good tenant that communicates with you on repairs, so you don't need a management company. That's wonderful!

Palm Springs sounds like a great opportunity for airbnb - I wonder if restrictions apply with airbnb in Palm Springs though, or are they pretty lenient on that? e.g.: do you need to purchase a license, & do they restrict short-term rentals?

I know people that rent out places on airbnb but they are on site e.g. renting a cottage in the back of their home, where they can be there in the event anything happens. We know a couple in west L.A that rented out their place, but the restrictions made it very hard for them to take short-term leases, so they can only do long-term airbnb rentals (Minimum 30 days) because of the laws in that area.

I'm always hesitant to try airbnb with our places, and prefer long-term tenants as it's much easier and predictable income, but I've also heard success stories from people who use airbnb and make more money vs long-term renters. Just has to be the right city/circumstances.
 
great thread!
i used to be hung up on the slow and easy method on less desirable areas, because it looks safer, but also it's the barrier to entry ($$$) on more desirable areas

so many ways to skin a cat, different options for different investors, sfr, multi units, apt, mobile homes, etc, but i still think where the jobs are, and schools would be key for long term investing

the whole airbnb thing doesn't send a good vibe from reading all the horrible news, you know, washing down mattresses after, crazy partying, the calculation used needs to be different than a standard rental for depreciation!  and then its also relying on people travelling for leisure compared to tenants needing a roof over their head, moreover, the city/hoa can enact laws against it, but the flip side is the rental rate is much higher... TI problems...
 
I can't believe Johns Creek got 4 votes, does Panda have 4 accounts?

Looks like Irvine is the winnah... followed by SF (I guess I should have said NorCal so it includes all those other tech hoods).
 
I didn't vote because I think RE prices are in the "up" right now and it's difficult to generate positive cash flow.

I own a 4 bedroom house in LA County just north of Cerritos.  In 1990 it was sold for $200K and in 2012 it was sold for $240K.  So if you bought it in 2012 you only paid 20% more than the guy back in 1990.  But if you were to buy it today you'd pay over $450K.  You can buy at $240K and rent it out for a small profit, but not at $450K.

There are many areas in LA County where RE prices dip hard in downturn.  Norwalk, Downey, El Monte, etc. where you can find nice cul-de-sac homes deep inside residential areas and walking distance to local schools.

You might prefer more expensive areas like Cerritos, Rossmoor, Seal Beach, etc. for your primary residence.  But for rental income property those areas are too expensive.

Look to areas north of Santa Ana.  Many cities are being revitalized.  If you're betting against freeway traffic and investing along light rail stations, make sure you actually try to park and ride at the local station first.  For example Corona station train is standing room only in mornings and Buena Park station parking is difficult.
 
momopi said:
I didn't vote because I think RE prices are in the "up" right now and it's difficult to generate positive cash flow.

I own a 4 bedroom house in LA County just north of Cerritos.  In 1990 it was sold for $200K and in 2012 it was sold for $240K.  So if you bought it in 2012 you only paid 20% more than the guy back in 1990.  But if you were to buy it today you'd pay over $450K.  You can buy at $240K and rent it out for a small profit, but not at $450K.

There are many areas in LA County where RE prices dip hard in downturn.  Norwalk, Downey, El Monte, etc. where you can find nice cul-de-sac homes deep inside residential areas and walking distance to local schools.

You might prefer more expensive areas like Cerritos, Rossmoor, Seal Beach, etc. for your primary residence.  But for rental income property those areas are too expensive.

Look to areas north of Santa Ana.  Many cities are being revitalized.  If you're betting against freeway traffic and investing along light rail stations, make sure you actually try to park and ride at the local station first.  For example Corona station train is standing room only in mornings and Buena Park station parking is difficult.

The area around South Coast Plaza (Santa Ana/Costa Mesa) isn't a bad option.  I had a condo that I bought in 2008 for $210k (a little early because it went down as low as $175k) and sold it last year for $325k.
 
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