I am just getting started in Southern California. Being such a competitive market and a medium price of $500K+, I am open to creative suggestions from you seasoned pros.
So, knowing what you now know, how would you get started in this market?
Though I am investing out of state, there are many still investing locally in properties that are cash flow negative, gambling on more appreciation. Problem with, IMHO, is a lack of an exit strategy.
I do know a few investors rehabbing, though they are purchasing homes $1MM + and spending $100-$200K for improvements. This takes a lot of liquid cash but the returns are tremendous.
I just had lunch with a veteran investor here in L.A. (he just turned 80) and his advice is simple, patience.
He insists on only purchasing properties locally (I disagree) and believes, through his direct experience in many cycles of the local market, that the time to buy is in the near future.
Andy Gibbs
Patience is always a good thing, I just wish it wouldn’t take so long 
I know of investors doing well in the $500K-700K range but they have already built their network (which I realize is the key). The challenge here is building a solid team and getting in the deals early enough.
I have the cash flow and an investor to support $300-400K but there are very few properties in this range. I can probably bring in another investor but since I am new, I would prefer to get some experience in the “low end” of the market first.
95% of the effort is finding the right properties, any thoughts?
Also, I am still developing my team so I would welcome any thoughts on developing a team (please let me know if there is anyone out there that may be interested in getting into this market).
Look for areas 1 to 2 hours away from the 1 million dollar properties. As long as employment stays strong, 1st time homebuyers will hold up the affordable homes.
You could drive to Riverside, San Bernadino or fly to Las Vegas
Also new to the SoCal market and Real Estate in general. Depending where you are coming from, I suggest you attend OCRE small investor’s meetings like the one they are having in Irvine Spectrum Doubletree Hotel this Thurs June 9. It would be a great opportunity to network and learn from rehab gurus like Reggie Brooks who will also be there giving a seminar. If you are in or near Orange County I suggest checking out www.ocreforum.com.