Top Real Estate Markets To Invest?
Hi,
I am currently looking to start investing. I live in CA, and managed to purchase my first investment prop. about 6 mos. ago. I have about $50k cash, and can get a loan if needed. I am looking to start investing out of CA. What are some of the top markets to invest in right now? I am looking to flip a property.
Thanks for your help!
Elizabeth[ Edited by slocountyrealtor on Date 08/14/2004 ]
Hi Elizabeth,
All things being equal, you may want to flip where you are familiar with the area and prices.
Be careful out there Ca. investors, the resell market turned ugly a few weeks ago. The inventory in the San Fernando Valley went up 300% in the last couple of months and Greenspan seems set in his ways about raising rates.
GREAT opportunity to buy from those that HAVE to sell though.
Good luck.
Di
Is it possible that South CA market is starting to go down?
I live close to LA and wait for the market to go down and maybe it will be good for income property.
Is it possible that South CA market is starting to go down?
I live close to LA and wait for the market to go down and maybe it will be good for income property.
"Top" is a tough quesiton to answer. Additionally, perhaps people are reluctant to announce to the world information that they believe to be very valuable. If anything, it may create a conflict of interest. Perhaps their market is a bit soft and they're trying to sell. By creating a bit of hype, they may be able to attract a few speculative investors who wouldn't have looked there otherwise.
Secondly, there is no universal "top market". There may, however, be a top market for you if you can expand on what you like.
For investors who are seeking appreciation, San Diego has been incredible. For those seeking cash flow it's been Terrible. So is it a "Top market" or not???
I could go on. Some like markets that are hot so they can sell fast, other like em soft so that there are more motivated sellers. Some like big cities, others like smaller cities. There are lots of variables and people are making money in just about every market out there. Many consider my market to be a bad one and me and many others have done very well lately.
Perhaps if you can ask a more specific question we can be more helpful. In the mean time, happy investing.
Thanks for the info. In regards to the inventory flooding the market in Ca, I have heard about that happening in Orange County, and it may possibly be moving upward throughout Ca. Also, we recently had a briefing regarding interest rates from Warren Buffet. He expects interest rates to rise 2% in the next 24 mos. I guess by "top markets to invest in" I mean areas who still have low inventory and high demand, but lower prices than Ca. I live on the Central Coast and paid $400k for a 3 bedroom older home, which was a wonderful deal. It has appreciated $75k in the last 7 mos. Howeved, I cannot afford to continue to put that kind of money out right now. Right now I need a hot market that is appreciating quickly, so I can make a fast turnover. I will be sitting on the property I have, but would like to put some cash in my pocket. I have heard that Arizona and Hawaii are hot markets right now, also the Central Valley of Ca. Any ideas or advice is greatly appreciated.
Thanks! :-D
Elizabeth,
You say you want to flip, but then go on to say that your looking for a fast appreciating market. Whether or not houses are appreciating is not a big concern if your going to flip.
You make your profit when you purchase real estate. What you pay for it is what matters. If the market doesn't go up, who cares? You bought for a price where you weren't banking on appreciation. If the market goes down a little, are you in trouble? No, it just means your profits have been reduced.
With the way the market has been over the last few years, a lot of people have come to the conclusion that investing is merely buying something and waiting for it to go up in value. That's not the way it is.
This is why I suggest you stay in your home turf and flip. Where else do you know the market well enough to make a desicion on a deal that has to be made in the next 1/2 hour? (many real deals have VERY short windows in which to act).
I would venture to say that there are about 100 great deals in SLO right this moment. There will be 5 more tomorrow.
My suggestion is that the grass isn't any greener elsewhere and your driving by deals everyday. Look harder.
Good luck
Di
The Vegas market is on fire.
http://money.cnn.com/2004/08/12/real_estate/buying_selling/2Qmetroprices/index.htm
Home prices in the second quarter of 2004 were up 52 percent.
Downside is if you buy in at top and that Vegas market pops...
Look out below.
[addsig]
Thanks regal and everyone else.
This info. really helps. I appreciate your help!
Regal calls it correctly.
Of course there is a tip. You examine the daily recording of deeds and look at the percentages of Grant Deeds, (sales) recording in relationship to Trust Deeds and other types of recorded devices. Sub of Trustee etc. etc. I have a source and I do it almost on a nightly basis. In a nutshell
The Spike is there but there are many people who follow a spike and they get hung on it. I ran on one the other day. Assist 2 Sell have it. The Owner is handling the open house herself. She exposed that she recently bought the property after living in it for 20 years as a renter. Now she offers it at top market . Her eyes say the price is soft, and her son looks elsewhere. I now await the information on the existing financing and then my offer will be made. I think she has to sell. She fidgets alot.
Now this one is just a simple flip. Non Greedy. Standby Buyer,Nice family terrible credit but money in the bank. They will buy. They will be happy to get a nice house. Stay with the existing financing about a year or two and then see what is what. If the interest rate is too high. We will help them do a buy down and a proper interest. If not let her ride. There is a small monthly profit on the resale.
This is of course the San Fernando Valley. Our movements in price and sale are very notable. Not only the Hall of Records but the local MLS's everybody watches the statistics. But like every statistic you can not go by it alone. You have to read the people. I find it fun.
Stay in Calif. its a good area and has lots of diversity. You can play almost any game.
Now don't laught I am trying to buy a lot in Beverly HIlls way up in price. But my buy is Owner take back a PMTD with a small downpaymnt. The pay plan is 40 years no interest. Owner agrees to subordinate to a new construction loan.
I am going to erect one of our 5 container houses on it. at a cost complete of $58,000. I mean imagine all those old fashioned Spanish Colonials, and English Tudors and Michymachi specials and there this little 1400 sq. ft. house which looks like a collection of old steel boxes, which it is. Very modern state of the art everything. I think it is fun.
The 40 year no interest principal payments only is what makes it possible
God I love my HP12C calculator.
Cheers Lucius
I've herad from more than a few multimillionaire investors that Las Vegas and the foreclosure capital of the world Detriot is where its at. LV is appreciating in certain areas at 20-35%/yr.
i live in NC but was told that Tampa is hot, just what i was told. 8-)
I'm in the Denver area, which has been pretty soft, although some areas are exceptions; but going south 100 miles to Pueblo is a different story; not because it's a "hot" market, but because it can cash flow easily, and you can buy at under construction costs, yet it is a growing area. Seems to me that you gamble on appreciation in the expensive hot areas like CA, but some of these cheaper markets are good rentals. I got a 4/2 house in a nice neighborhood for 96k, remodeled it, and it rents for 1250/mo, and appraised at 145k. 10% cap rate returns are not hard to find there, so I think you have to define "hot". Seems there's a spectrum of either fast appreciation, or slow cashflow.
I can relate to Elizebeth because of the cost to get in. It's like high-stakes poker vs low. Pueblo is a good example, because it is literally 1/3 the cost of Boulder for the same house, yet rents are about 1/2 or more, so the numbers simply work better for easier cashflow and hold, and it still sees steady slow appreciation. You can never make the payments in Boulder or CA with say 5-10% down so it's a gamble on future appreciation - but a risk that resale will drop too.
My question is: how to find the lower-cost markets, that are also "hot", for shallower pockets?
I completely agree with Regal.
It does not make a difference because flipping is short term so being in an area that you are familiar with and have contacts is the best way to go. Which would obviously be where you live or close to where you live.