2/16 So I have been holding off, waiting until real estate comes down
enough to make investing make sense. Are there any areas in California
where buying property makes sense from an investing persepctive, i.e.
it is cash flow positive after paying mortgage, taxes and maintenance?
\_ I just bought a cash positive rental unit in E. Oakland. I know
there are a lot more available. Lots of condos being built so I'm
sure that there will be a lot of push to clean up the neighborhoods.
As soon as I get this one fixed up I'll be looking for another.
Also, there is an estimated 10,000 new people moving into that area
within the next few years...so the value has no where to go but up.
To tell you the truth its a great time to be a landlord.
-scottyg
\_ Now this is what I am talking about. Which neighborhood did
you buy in? Did you just buy one unit in a building or the
whole building? -OP
\_ Bakersfield, Stockton, Riverside, Fresno.
I highly recommend the followings: Rancho Cucamonga, Chino,
Corona, Upland, Fontana. Basically all the areas with a lot
of poor people with lots of kids and SUVs and minivans and
want to have a home but can't afford it.
\_ Uh, right now those are the areas that are melting down.
\_ ding ding ding you got it! that's why it's good to invest
\_ Nope, you are better waiting for the freefall to end and
get in as things start to uptick. Yes you will pay a bit
more than if you bought at the very bottom, but chances
are you are going to guess wrong. (Hint, right now things
are still going to fall for a while, especially in those
areas.)
\_ 1) You don't know that prices are going to continue
to fall.
\_ No I don't, but it sure has hell looks like they
haven't stopped falling. And it is stupid to buy
now if you can wait a few months and pay 10% less.
Really, really stupid. Even if you plan to hold
on for a long time. For one thing that means you
rents will probably have to go down, and that will
mean you may no longer be cash positive. Right now
is not a good time to get into the landlord game.
\_ Why would rents go down? Have they been going
down in those areas? I know they have been going
up in the Bay Area. I probably won't buy until
it looks like the market has stabilized, but
trying to time the bottom is a fool's game.
\_ Rents go down when housing prices go down
because people who can't sell their houses
rent them out, which causes an increase of
rentable units, which lowers rents
\_ And here I thought that rents went up
when more people who couldn't afford to be
home owners became renters, therefore
increasing the demand for rental property.
Have rents been going up or down in the
Inland Empire?
\_ I think it depends on what percentage
of housing is bought as speculation.
In some markets (like Vegas) it was
something like 25% (insane). Those
people already own a residence ...
2) That's why I want a place that is cash flow positive.
If it makes me a decent rate of return, I don't really
care what the face value is. I would intend to hold
onto it for a long time in this case.
\_ Ever heard the phrase "catching a falling knife"?
\_ Yeah and unless you have a really good understanding
of the market and a high tolerance for risk it is a
stupid thing to do. The OP doesn't seem to have either.
\_ What makes you think that I don't have a high
tolerance for risk? -OP
\_ Your list of requirements
\_ You actually have a point, but as scottyg
pointed out, it is not really an unreasonable
list.
\_ poor people make crappy tenants.
\_ that may be true but poor ppl are the reason why
they're tenants. thank god for poor ppl or else landlords
will not benefit from them.
\_ I don't think that is true in Riverside, at least not yet:
http://inlandempire.craigslist.org/apa/577695542.html
That place rents for $1800 and would sell for about $400k
right now, which just doesn't pencil out. It might make sense
at $300k. Or are you referring to multi-family housing?
\_ Santa Clara County
\_ Fremont, excluding the Mission San Jose district.
\_ Sure, if you find the right property. It can be anywhere if you
look hard enough.
\_ Find me one in SF, please. I doubt you can find anything that
has a positive IRR that is less than 8 units.
\_ What's my commission if I find you something and what's
your price range?
\_ You could have hot gay sex with me regardless of
your ugliness.
\_ Even if you find a rentable property do you *really* want to deal
with being a landlord? Are you going to turn over daily management
to some company that will eat whatever profits you might make or go
over there yourself with wrench in hand every time there is a
plumbing problem? And how much do you lose if it takes a month to
get new tenants in when the old ones leave?
\_ Actually, I already am a landlord, since I own a two unit
property in SF and live in one and rent out the other, so I
have a pretty good idea of what is involved. All investments
take some time and energy. You should calculate the vacancy
rate (5% or so) into your total return. If you are a good
landlord, it will probably be lower than that.
\_ So much for Haight/Ashbury's free sex free drugs free
whatever socialist movements.
\_ Gas, grass or ass, no one rides for free.
\_ I rented out my previous home in Fremont and got my real estate
agent to also be the manager. His cut is 10% of the rent. It
took us two months to find the first tenants, and they have been
there ever since for 4.5 years. So far I still have never met
the tenant once, nor did I need to go to the house to check out
or fix anything. -- !OP
\_ Just curious, are you still making a profit, even after
the 10% cut? Would you have done better selling the house
and putting the money in T-Bills? |
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