Desert Center, CA
With a population of about 200, Desert Center is “in the middle of nowhere”. It is located right smack in between Indio and Blythe, just 50 miles from the Arizona border.
What’s the logic behind choosing such a remote area?
It is affordable. Most of metropolitan and suburban California homes are very expensive and offer low cap rates for investors. Investors buy in, hoping (expecting) their homes to appreciate in value. While they’re generally considered safe investments, it is based on speculation – it’s gambling no matter how you look at it. I have high risk tolerance and I don’t like the idea of buying a $500,000 home to collect $2000/mo in rent. Those figures could easily halve if we have another recession.
My goal is financial freedom and the key to that is cash flow. I need something that generates recurring income. To get good cap rates, investors typically look out of state in low grade neighborhoods. I want a good cap rate but I also didn’t feel comfortable with either of those things.
Finding a niche. Who goes to Desert Center?
Snowbirds: The home is located within a small community called Lake Tamarisk, just north of I-10. Here, you will find retired snowbirds seeking warmer weather in the winter. There is a beautiful lake, a golf course, a church, and millions of acres of Joshua Tree desert to explore.
Solar farm employees: Just 6 miles north of Desert Center is a massive solar farm that generates enough energy to power 160,000 homes.
I-10 travelers: This is just conjecture, but I-10 is a huge channel for truckers and travelers coming to and from Southern California. Long treks require rest areas which is why you’ll see motels and hotels lining freeway exits. There is a 100 mile stretch between Indio and Blythe that has ZERO lodging options. Motorists get tired and need a place to sleep and shower.
Racers: And finally, my trump card. I’m an avid goer to sanctioned track events. Chuckwalla Valley Raceway is in Desert Center and while they offer camping and tiny cabins on the track, neither are appealing options to me. If I’m driving several hours to a race track, I want to get this done the night before so that I can get a good night’s rest and have a pleasant experience on track the next day. Proper rest is crucial to ensure proper concentration and enjoyment of high performance driving. Don’t forget – you need to make that same journey back after a long day ON the race track. Why camp in a tent or cabin when you can have a whole house to yourself AND 7 other friends? Park your car safely in the garage, have a nice relaxing shower, sleep in a proper bed, and hang out with your friends. Split the cost and it’s a no brainer.
There are challenges to being in the middle of nowhere.
Lack of convenience: The nearest gas station is 20 miles west at Chiriaco Summit. The nearest fast food and grocery stores are back in Indio (or Blythe, depending on the direction you’re coming from).
Distance: It’s a 2 hour drive from me and at least an hour drive for most contractors.
Weather: It can be brutally hot in the summer and it is dry year round.