Prices have increased in East Palo Alto over the past year but still offer good investment opportunities.
If you can find a house under $200,000, it will need more than "some fixing". It will require a major remodel.
You can find houses in the $225,000 to $250,000 range that could be rentable with "some fixing".
I recently sold a fixed up 2/1 to an investor client for $265,000 and I have rented it for $1,795.
I just sold a "fix and flip" for a client. Purchased at $255,000 and sold for $309,000.
The profit margin on the fix and flips have gotten smaller over the past year so I think the "buy, hold, rent" approach is a good one.
At one point average price in East Palo Alto was over $600,000. Current average price is about $300,000.
So even if prices do not return to the peak (which I believe they won't) they are still good investments.
Let me know how I can help.
Here on Trulia is a new RENT section. You can check there for what rental properties are listed for in E.Palo Alto as well as http://www.craigslist.com
If you would like me to keep you informed via email of listings $200k and less, as they come on market, please email me through my Trulia profile. Kind regards.
Thanks for your post. Unfortunately, there appears to be only one home in East Palo Alto that is priced under $200,000. This is a 3 bedroom 1 bath home located on Purdue, and which is being sold short. Check http://www.mlslistings.com for more information on this home.
More importantly, however, if your goal is to rent the home, there are several issues that deserve serious consideration before investing $1 in any investment property. As with any investment--be it stocks, bonds or real estate, the best investors know their market, their target customers (or renters) and the costs to repair and maintain their investment. Check rents in the City of East Palo Alto and confirm what types of homes are commanding rents of $1800-2000 per month. Also, is the average rent within the City $1800-2000 or is it a bit less? Where are the most desirable rental homes located? What is the relative size and what amenities are included in the home? Check school districts and see which districts "net" the best renters and rent because if the home you might purchase is located in a less desirable school district, your rental income will be affected.
Most importantly, be aware that lending practices have changed in recent years, so talk seriously with your mortgage broker before trying to purchase a home. There are now extra fees and requirements when purchasing investment property, including increased downpayment and a slight increase in interest rates.
Know your market and your rental customers well before buying to ensure that your investment works for you. Good luck!!
Grace Morioka, SRES
Area Pro Realty