OfflineAs Dean explained in his book, there are a lot of factors that changes how the cycles go up an down in real state nationally and locally. I'm sure all of you have read article online about Stockton, CA being one of the worst cities with high foreclosures. Well, trends here in Northern California are changing and home sales have began to increase since January of 2008. As a new investor I had a price range of $170K and have placed approximately 20 offers for this amount or less. Well, doing this for the last four months and not getting a property, I had to change my strategy. It was not until last week that an offer was accepted for a 3 bed/2bath home for $180K. I had to increase my offer by 10K. Investors/home buyers here in Northern California are catching up to the great deals on bank owned properties and are selling fast. A home can go on the market today and by tomorrow afternoon, it may have up to 10 offers. I've been competing with investors and higher offers. So, again, this proves Dean's theory on local markets. I'm hoping to buy at least two properties to hold, rent and sale later as the market improves.
Northern California Real State is changing!
Posted on: Tue, 04/08/2008 - 22:45
I am curious about your deal. Will the property cash flow at 180K? How much are you putting down?
Thanks,
Mark
I hope it will give some cash flow. However, if I came even, that is, my renters covering the entire mortgage payment, this still a good deal. The house is on a very desirable area and this home sold 2 years ago for over 300K. So at the end, I will end nice equity money when I sell it.
yeah palomo21 but you still didn't answer the question about how much money you put down for a down payment. how much are you renting your property for? is it going to cover the property taxes and the home insurance too.Also, is going to take a while for those properties to gain their value again. There's rumors that here in california houses are still going to decrease more in value has your cumminity drop bottom yet?
OK, because I'm getting an interest only mortgage loan, this loan is giving me the lowest mortgage payment per month and it does include property taxes and home insurance. I'm putting 10% down of 180K, which is $18,000 from a line a credit I have. This brings down the mortgage loan to 162K. My mortage payment would be $1131 per month. I'll be renting this house for at least $1400 per month, maybe more. Now with $1400 I'll be paying my mortgage payment, line of credit payment and utilities. This should be around $1300 - $1350. Like I said, I may or may not have a cash flow. However, I'm looking to keep this property and cash out the equity in the future. That's why I'm not that worried. Now, depending what part of Sacramento, CA you're, there are areas that yes, they're in decline. However, Antelope,CA which is 20 minutes from downtown is a desirable area families are looking to live because is close to Roseville, another desirable area. I hope I answer all your questions. As Dean pointed out in his book, I'm looking at a long term investment. Even if it takes 4-6 years for this market to turn around, it's all good. There are new developments here in Sac, so I know people are going to need a place to live. Let's remember, Sacramento is the Capital of California. An important part of the state's economy.
Peace