I spent the weekend in Zinfandel-filled Lodi, CA. Just 15 minutes north of foreclosure-ridden Stockton
, the Lodi real estate
market has definitely taken a hit over the past couple years.
While the low prices aren't great for home owners - especially those in danger of foreclosure - it is great for investors. And hanging out with smart 20-somethings on Saturday, the conversation soon turned to opportunities for real estate investing. Included in the conversation was one current investor (purchased his first property in Sacramento last month) and two investors-in-the-making. This last group was the most interesting.
Working together, they've put offers on 4 foreclosures only to have each of their offers - all at least $10K more than asking price - rejected. Instead, each purchase has gone to people paying full cash. As one of the guys is a contractor who understands the difficulty of the remodeling process, they're not jumping in blind. However, they are jumping in without full cash.
The friend who purchased the Sacramento property did so with his dad, who already holds various real estate investments. So in this example it appears that while this market may be great for experienced investors, it's tough for the less experienced who are putting in their own work but not full cash. And if they're struggling to get an offer accepted, what about the families hoping to take advantage of low foreclosure prices?
What do you think - does the edge for experienced investors ultimately hurt the possibility of home ownership for others?