Home Buying in 95014>Question Details

Shpitz, Other/Just Looking in California

Real estate investment in the US.

Asked by Shpitz, California Sun Feb 22, 2009

Would like to make a real estate investment in the US. This will be my first real estate investment. Trying to find an area in the US with future potential once the market rebounds. Looking to be cash flow positive after 20% down. Any recommendations?

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9
Raul Pineyro’s answer
My advice is almost any market in the U.S. could work for you if you stick to basic Investment Criteria of Cash on Cash and Internal Rate of Returns.

I recently wrote a blog on the diferrences of the INCOME & SALES Approaches to Value in Commercial Real Estate. In the blog I speak about how these approaches were used in recent years and how it affected the market and offered some suggestions to help speed the curve of this "Distressed Asset Disater" we are in.

If you like please feel free to read my blog. It is posted here on trulia.

Best of Luck, if I can help answer any questions you may have please feel free to contact me.

I wish you every success!
David
0 votes Thank Flag Link Sun Mar 15, 2009
If you want appreciation wanting to go outside of California. I was told many foreign investors flock to Motor City like Detroit snatching blocks of homes. Some (dogs) homes start a whole US $(1 buck) and $50K-100K are the norm. Yes, you really stretch your US dollar.

Las Vegas and Phoenix are loaded with inventory. Many new homes in LV have not been visited after being on the market for 1-2 months. The areas always attract baby boomers.

Here in No. Cal, Sacramento, Stockton, and Tracy areas you can buy as many foreclosed properties as you wish. The Bank will look at your finance restricting your mortgage. The interest is non-owner occupied rate however. Near the Bay area I showed a 90K 3 BR home in Hollister, Ca. For Bay Area residents wanting to
manage their own properties I suggest local REOs as many have snatched up by investors quickly.
Sam Shueh
0 votes Thank Flag Link Sun Mar 15, 2009
Hi, I would like to add to what the other agents have said. First off I agree whole-heartly with John and Larry they have given you the best blue print for success. I work in the area of REO'S ( bank owned properties) I believe they will give you your best deals in the Bay area which if you live here would follow the investment strategy recommended. Regardless of where you live, here is what I would recommend you do put in 2 searchs one for active and one for recent solds. This will give you the data on how stable the area is, how fast are the properties selling, are they going over asking price? etc. If you go to my web site you can set up those types of searchs. Next I would go to craigslist.org and look at what rents are going for in your area that way you can gage your risk reward. With this start you will be able to move with confidence and not be bogged down with all the "bad news" out there you will have the actual facts.
I hope this helps.

If you have any questions or would like a consultation about this feel free to contact me.

Regards,

Allyson
(408)705-6578
allyson@homesbyallyson.com
0 votes Thank Flag Link Mon Feb 23, 2009
Hello - you've already gotten some great recommendations, though I'm going to agree the most with Larry Hines and recommend that you start by buying local. I recommend buying within 30 minutes drive of where you live, if you can find a property that meets your investment guidelines. Here's why:
- Travel costs will be lower during the acquisition process.
- You should manage your first property yourself to learn how it is done. Later, when you start hiring property managers, you will know what they should be doing.
- When there is a problem with your rental you want to put your own eyes on it, not just call a plumber, carpenter, electrician, etc. Showing up to see the problem yourself will reduce the number of bogus problem calls you get from tenants (and you will be getting some).
Before you start looking at properties, work with a broker who specializes in investment properties and can help you create a draft business plan that includes a profile of the precise property that fits your needs. Later, you will use this plan as a template for most of your purchases regardless of which market you buy in.
All investors want to buy in the hot markets, regardless of where that market is, but for your first investment you should consider a good deal close to home as you grow your investment skills.
Best of luck, John
0 votes Thank Flag Link Mon Feb 23, 2009
I would say look in area's that have been hit the hardest, like the Inland Empire. You can find SFD's for between $100-200,000. It may take awhile for this area to recover, but it's a pretty darn good location in the long run. The climate is great and it's an hour or so from LA, the beach, the ski slopes, Palm Springs... Not a bad deal.
0 votes Thank Flag Link Mon Feb 23, 2009
Make sure to do your research on the rental market where you are looking to purchase. The rental market seems to be booming right now, with so many limitations on acquiring a mortgage. Make sure you speak with a great lender and your tax advisor about the benefits and risks of investment property. Make sure you work with a realtor who may be able to help you figure out your net operating expenses, vs. income.
0 votes Thank Flag Link Mon Feb 23, 2009
Stay locally to start. Get some experience before you start spending your future cash flow on traveling expense. Do some research to see what happened in the past by you(history does repeat). Go find someone who has the experience form the early eighties (oh fun time also). Stay in a first time home buyer market (to start), with more potential tenants, easier to rent .
0 votes Thank Flag Link Mon Feb 23, 2009
Shpitz

You can now buy property with 20% down that cash flows in the Bay Area.

Other areas of the country Dallas Houston Indiannapolis Oklahome City and may more can offer the same.

I think it all depends on what you are looking for.

I have real estate contacts all over the country if you would like some referrals.

Arn
0 votes Thank Flag Link Mon Feb 23, 2009
We work with investors across the country Dallas Fort Worth per national media well documented better stable employment than other areas of country.

Dallas is still a city where families can afford a home still have disposable income for personal lifestyle.

I would need to learn more about your business plan . I am not only a realtor, investor, loan officer.

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972-699-9111
Lynn A. Crosby ~ National Featured Realtor
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0 votes Thank Flag Link Sun Feb 22, 2009
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