New Investor in a Declining Market

Ok so I love to make money It is magical… I opened a garage door service company a year and am currently doing 15,000 in sales per month… I know its not much that is why I am positioning myself for my
first real estate investment in the USA. My wife and I currently hold 3 commercial properties in Mexico which
produce a 20-30% annual return… we are also looking at some new ones in Guadalajara, that will produce a 30+% anual return. These are great income supplements but we are now venturing into the BIG Time…
The Southern California Real Estate Market… I believe we can get about $500,000 financed… my wife will have her RE license soon, and I will have my class B general contractors license. my Idea is to look into the Orange county market and buy a duplex… Fixer-upper… rent out half and live in the other… But I have allot of questions:

  1. Is this a lame idea?
  2. What would be the best way to find the best deal? MLS, auction, other…
  3. what are some other ideas that would generate more cash quicker as the market is bottoming out?
  4. Should I reserve funds for a quick restoration and flip or just fix it over a period of time.
  5. Any other suggestions would be great…

Buy that duplex that you want in Orange County. I know prices are really high there-but where do the workers live?

Anything near the UC Irvine campus should rent in a minute. Our daughter had a college apartment there and all 4 of us parents had to co-sign as well. They knew what they were doing.

To get double or triple the rent, try doing a furnished high-end rental. They are a lot more work but you get a lot more rent. Should be a great area for a corporate rental.

Good luck to you

This is not a lame idea. This is a speculative idea. I contrast speculation to investment in the following way: an investment provides a high degree of certainty that you will keep the money that you invest and obtain an acceptable return; speculation risks the principal in the name of obtaining a return which is usually larger than an investment return.
A $500,000 duplex will obviously not cash flow, so a fix and flip in a falling market runs the risk of losing at least some of the original investment. A lot of investors are finding distressed properties in this market, fixing them up and selling them for a profit.
The key is to buy below market value. If you search “finding bargain properties” or some similar phrase in the search link at the top of the page, there are a lot of posts which describe ways to find distressed properties. Some examples of ways to find distressed properties include: place a “we buy houses” ad in the classifieds or on the internet, set up bandit signs, join real estate investment clubs, business cards, and bird dogs.
The MLS usually is not usually a good place to find properties below market value.
Auctions can be a mixed bag. Many properties in auctions are properties that you would not want to own at any price. Many people get excited during auctions and wind up over paying.
Assuming your duplex will be negatively cash flowing, and the value of real estate is generally falling, you will have carrying costs, and you will want to get in and out as quickly as possible.
Definitely get to know your market. It wouldn’t surprise me at all if some areas of Orange County are depreciating, while other areas of Orange County are appreciating.