Sandy, Home Buyer in East Palo Alto, CA

I am looking for a low cost investment property in East Palo Alto. pre-forclosure/ short sale.. or SFH under 200k. we can do some fixing up. Thanks

Asked by Sandy, East Palo Alto, CA Fri Nov 12, 2010

We hope to get about $1800-$2000 rent/ and hope for a street that is relatively safe and easy to rent to new professionals or couple moving into the area.

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3
Sandy

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.
Arn
0 votes Thank Flag Link Sat Nov 13, 2010
To see what neighorhoods you might consider "relatively safe" in East Palo Alto (or any city) you can check out this link: http://www.crimereports.com

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.
0 votes Thank Flag Link Sat Nov 13, 2010
Sandy:

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!!

Sincerely,
Grace Morioka, SRES
Area Pro Realty
0 votes Thank Flag Link Sat Nov 13, 2010
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