1st RE investment. Buy or Build 4-PLEX?

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  1. #1
    TDW
    TDW is offline Member
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    Default 1st RE investment. Buy or Build 4-PLEX?

    I am looking to break into the Southern California RE market. I have experience in the Eastern European market, none in the U.S. What are my options with 200K cash? Should I buy a used/pre-built (10+ year old) fourplex ...

    OR

    Buy inexpensive land in a good location and build a new/low(cost) fourplex from scratch with a 12mo turn around time?

    Would you suggest renting out the fourplex apts. as furnished(ikea) or unfurnished?

  2. #2
    SWELLS's Avatar
    SWELLS is offline Senior Member
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    i would start by getting familiar with the market - $200k cash doesn't buy you a condo in most nice parts of so.cal let alone a 4 plex. also a 12 month turn around is ambitious especially if you were to build on your own so evaluate your investment goals, set your criteria, then find the product that fits.

    you can never study too much - this is still a volatile real estate market.

    good luck.

  3. #3
    TDW
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    Sorry let me clarify that the 200K represents the down payment for a potential investment property that I would like paid off by rental income within 7-10 years. 200K represents the amount I would prefer to invest in "each" separate complex.

    200K down as 30% would allow for an estimated purchase price of 700K fourplex/5/6 whatever size depending on location/cost, the remainder on mortgage.

    I am not picky and would actually prefer to buy/build in a lower income neighborhood as this strategy has worked well for me in the EU market.

  4. #4
    redjeeper's Avatar
    redjeeper is offline Senior Member
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    In the Mississippi market, you could build a 4-plex with the $200,000.
    You're born, you take sh*t. You get out in the world, take more sh*t. Climb a little higher, take less sh*t. Then one day when you're in the rarified atmosphere, you've forgotten what sh*t even looks like. Welcome to the Layer Cake son.

  5. #5
    Maximus's Avatar
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    Quote Originally Posted by TDW View Post
    I am not picky and would actually prefer to buy/build in a lower income neighborhood as this strategy has worked well for me in the EU market.
    Thats what is working best in the low income areas around me. Im not sure if you are familiar with the Oceanside area of So Cal particularly the San Luis Rey river area? I know a guy that's been buying up duplex homes (not both just individual ones) there over the last year and has turned a good profit off of them. The tenants have been pretty good too. The going price of those is like 120k or so. There is also a bunch of small apartment complex's (4,5,6 units etc). I know there use to be a few for sale in the 700k to 1MM range, but i haven't been paying attention the last few months.
    Fortune Favors the Brave

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