Home Buying in 92109>Question Details

Drasta, Home Buyer in Phoenix, AZ

Which city would you invest in and what type of property when your strategy was positive cashflow buy and hold?

Asked by Drasta, Phoenix, AZ Fri Dec 10, 2010

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23
Hi,

I would go for lower end, and middle end condos and homes in Las Vegas, San Diego, Pheonix, Florida.

Good luck!

Khrystyna Chorna
Prudential California Realty
516 5th Ave,
San Diego, CA, 92101
tel: 619-808-7064
fax:619-702-9044
http://www.sandiegodowntowncondos.net
http://www.youtube.com/chornarealestate
2 votes Thank Flag Link Wed Mar 16, 2011
I would absolutely _avoid_ condos. Everytime I run the numbers, on nearly every condo, the HOA dues kill the deal. Yes, there may be some that work, but all in all, the single family homes are going to avoid that problem. And, generally, there is no real limit on what the HOA can charge.

In fact, the cashflow problem gets worse when you are in states that do not put a cap on the increases in property tax rates. That is, in CA, we have Prop 13, which limits property taxes to 2% / yr, regardless of how much the property value might increase. However, I got burned in AL with properties that once made sense, and then the property taxes quadrupled, making cash flow properties into net neutral properties (of course, the insurance increased by 10x - which also hammered the cashflow).

So, when looking for the long term hold - the volatility of the taxes and other expenses should be considered.

Robert T. Boyer, Ph.D
FinestExpert.com co-founder
http://www.FinestExpert.com
http://www.WJBHomeLoan.com
http://www.SanDiegosFinestRealEstate.com
http://www.Grandmaster.com
Web Reference: http://www.FinestExpert.com
0 votes Thank Flag Link Wed Mar 16, 2011
Drasta

You are in a great city to buy and hold right now ! Depending on Cash on hand you have several options ! You are in the Phoenix market - There are several auctions for homes less than 5 years old new and large located close to the 15 prisons we have here in Az ! They are selling between 35,000 - 45,000 at auction - You must have cash on hand for Auctions though -

There are several people to market these homes to that work in the prisons and have high paying jobs and would love to live in one of your rentals !

I hope this helps - I would be happy to speak with you if you are still in the market to buy something -

CASH BACK REALTY
http://www.cashbackrealtyaz.com
480-985-9055

Stephanie Sandoval
0 votes Thank Flag Link Mon Mar 14, 2011
Drasta

You are in a great city to buy and hold right now ! Depending on Cash on hand you have several options ! You are in the Phoenix market - There are several auctions for homes less than 5 years old new and large located close to the 15 prisons we have here in Az ! They are selling between 35,000 - 45,000 at auction - You must have cash on hand for Auctions though -

There are several people to market these homes to that work in the prisons and have high paying jobs and would love to live in one of your rentals !

I hope this helps - I would be happy to speak with you if you are still in the market to buy something -

CASH BACK REALTY
http://www.cashbackrealtyaz.com
480-985-9055

Stephanie Sandoval
0 votes Thank Flag Link Mon Mar 14, 2011
Some listing agents would like to tell you you should invest on the properties they list.
0 votes Thank Flag Link Sun Mar 13, 2011
Rents in Las Vegas are moving up nicely. Almost no construction of SFR in las t 3 years and almost 5000 new resident added per month. Demand for well located 3 bed 2 bath with backyard is high. You can make cash flow with as little as a $70,000 house.

David Cooper
Las Vegas Real Estate Foreclosures for with Cash Flow for Imnvestors who DEamnd Below Market deals.
Let's Talk +1-7024997037
0 votes Thank Flag Link Sat Feb 19, 2011
The key is the person who asked the question said "cash flow". You are not going to get positive cash flow in the beach areas of San Diego unless you put a huge down payment down and then your return on investment is not very good, and the cap rates are very low. What you are doing in beach areas of San Diego is betting or "hoping" for future appreciation, not investing for cash flow.

I think the better areas for "cash flow" are the areas that have been really slammed like Riverside/San Bernardino County, Las Vegas, Phoenix and Florida. Getting a SFR in Las Vegas for $90,000 that rents for $1,100 will be positive cash flow. Some areas of more inland San Diego may not be bad, but the cash flow will never be great with SFR's in San Diego and they are older fixer properties.
0 votes Thank Flag Link Fri Feb 18, 2011
Im partial to my city Colorado Springs... LOW TAXES!!!
Web Reference: http://EveryListingNow.com
0 votes Thank Flag Link Wed Feb 16, 2011
Different strokes for different folks

i have a client who will only look for beach-front properties since waterfront properties seem to keep their values better.

Others look at university towns or state capitols where there will always be a demand for housing.

Single family homes pose more red ink possibilities if not rented whereare multi-unit properties may be able to take the hit if one 1 out of 4, for example, is vacant.

If investor intends to manage the property himself, it may be advisable to have properties within 30 minutes to an hour's drive from where investor lives to maximize management efficiency and responsiveness to tenants' needs/.
0 votes Thank Flag Link Sat Feb 12, 2011
Palm Bay Florida
According to Cnn money!!

Janet Brown
0 votes Thank Flag Link Thu Feb 10, 2011
I am getting $750 a month rent on a 2 bed +2 bath condo in a Class A, Gate Guarded, Golf Community that SOLD for $55,000 cash in a short sale. The original price for the unit in 2006 was $214,900.
My positve cash return on a $55,000 investment is $400 a month. Plus all my trips to Vegas become tax write off's when I inspect my investment.

David Cooper +1-702-499-7037
davidcooper@LasvegasWinner.org
0 votes Thank Flag Link Thu Dec 16, 2010
Currently, I am teaming up with variety of investors for the acquisitions of bank owned properties. Our recent track record includes acquiring several bank owned properties in all cash transactions at 50%-85% discount from their previous recorded prices. We created value by improving the properties and leasing them for annual returns of 12%-18% (ROI). Please do not hesitate to call/e-mail me.
Web Reference: http://www.lajolla.tv
0 votes Thank Flag Link Wed Dec 15, 2010
I like lower-end single family detached 3bd/2ba houses in areas that were slammed by the downturn, but have fundamentally sound infrastructure and desirability.

I don't like higher-end homes, because they will likely correct much further, and if you want cash flow, it means you’ll be using a lot of cash, where cost basis means everything.

And I don't like condos because they subject new buyers to owner occupancy ratios when qualifying for financing... so once the complex drops below 50% it makes attracting new buyers very difficult. I expect this to be an issue more and more as these areas deleverage further. And with many of these complexes having so much deferred maintenance (built in late ‘70s and early ‘80s), this may cast a dark cloud over HOAs and the folks who shoulder the assessments and dues.

Meantime even though lower-end SFR's will see further price declines as rates hike back up and the economy deflates back to reality, there will be many former higher-end homeowners being displaced, who still need shelter in areas close to what they love and where they work.

Ironically, as inflation comes home to roost, real estate investments in fundamentally desirable areas, which is largely responsible for the mess we face today, will benefit strongly, however this will take a much longer time frame than most folks realize... so if you can sit back in the meantime, and enjoy 4-5% ROI after factoring operating expenses, you'll position yourself nicely to weather this storm.

Call me for suggestions on communities that fit this bill within San Diego.
Web Reference: http://www.SethChalnick.com
0 votes Thank Flag Link Fri Dec 10, 2010
Florida's good because of the drastic fall in prices.

San Diego can still be a little high for good cash flow in most cases, especially when compared to Florida's prices, but I would stay in the beach areas (high prices & rent, great rental market) and the areas around SDSU (lower prices & rent, great rental market). Lower priced properties are in high demand by first time buyers and cash investors, so there's competition, and when there's competition, prices aren't always that negotiable. I'd throw out some short sale offers, as those don't attract the same number of buyers, and buyers often drop out when they get a foreclosure that can close faster. Neighborhoods can change drastically with just a few streets, so be careful where in each neighborhood you buy. Some of the up and coming neighborhoods here have been up and coming for a decade ... Sandra's right about the super cheap condos here that have a very low owner occupancy rates; only cash investors can buy, so the prices are really low. If you plan on keeping the unit for the long haul, those could be good (just harder to liquidate if you have to wait for a cash investor who has the same investment strategy).

Keith was right about retail infrastructure too, and the best communities have them in the works or are newly complete - prices will go up as people move in when they're up and attracting customers and employing workers.

University towns anywhere are usually good for the long haul because of student and faculty rentals, and also because they attract an active senior community if the school has continuing education programs.

Also research towns just outside of major cities people recommend. They should be close enough to commute to work, but have lower prices. You'll make more if you gear your rentals toward students and charge per room, but it's a lot more work and wear and tear.

I love Robert's web site for info too!
0 votes Thank Flag Link Fri Dec 10, 2010
BUT remember, with all investments, THERE IS A RISK ! consider the risks before you make any kind of investment and only invest what you can afford to LOSE !
0 votes Thank Flag Link Fri Dec 10, 2010
LAS VEGAS !!!! my accountant just purhcased in FULL CASH 10 properties, put in renters and is making $$$ thousands more than if he just got interest from the bank for his investment.
0 votes Thank Flag Link Fri Dec 10, 2010
Condos with "cash only" terms are deeply discounted for investors. Usually cash only terms due to low owner occupancy rates and HOA litigations. Also good rental statistics for calculating ROI. Otherwise you are going to pay market rate in Downtown, Old Town, Mission Hills, North Park and South Park due to thier desirability. With the higher purchase price and rental rates in these areas, I am seeing most 'Millenials' going into Golden Hill. (Just south of South Park, North of Market Street, East of Downtown) The CCDC http://(www.ccdc.com) had this area pegged for revitalization 3 years ago before running out of money. Has a simular 'vibe' as South and North Park...just a bit rough around the edges.
0 votes Thank Flag Link Fri Dec 10, 2010
Hello Home Buyer, that's really a tuff one since there are so many communities within San Diego County worth investing in. I guess my question to you is HOW MUCH do you have to invest, if the sky's the limit then I would stick with the costal areas because tourist seem to be a very stable and predictable way to generate larger overall rents.

Some other areas to consider would be communities with mature infrastructure having anchored tenants like Costco, Walmart, Home Depot, and a good selection of popular restaurants and other common stores that most people commonly use; basically, stable communities that have most or all of the necessities for everyday living. Also areas near schools, colleges, and universities since those areas seem to attract stable money, like working families capable of paying market rental rates, possible at more stable intervals.

I hope this information was helpful and have a great day!
0 votes Thank Flag Link Fri Dec 10, 2010
San Diego:I have been succesful with 2-4 units in the North park area, an up and coming neighborhood.
The College area is also a great option, due to the high demand for rentals, being so close to SDSU.
I am helping several investor right now to look for positive cash flow properties.
Good luck to you!

Christine
0 votes Thank Flag Link Fri Dec 10, 2010
I would look at cities that have high rental rates and good employment, with growth. I would look at the return on investment and that can be very specific.

Good luck,
Joan Wilson
0 votes Thank Flag Link Fri Dec 10, 2010
San Diego California beach towns are ideal for investment. In addition to having a great supply of willing renters due to the high student population from the several nearby colleges the beach area attracts the yuppies from across the country. San Diego real estate historically sees high appreciation and tends to withstand downturns better than other parts of San Diego County and other states.

Happy investing.

Steve Innis, Broker since 1982
Lic# 00644965
0 votes Thank Flag Link Fri Dec 10, 2010
Orlando Fl. Condos are priced very atractive and there a big demad for rentals in the area, a positive cash flow , seem returns in the mid to uper 20%r ange
0 votes Thank Flag Link Fri Dec 10, 2010
Go to FinestExpert.com On the right side, middle, it identifies the top 10 cities for cashflow. You can also find the top 10 for discounted sales prices and the top 10 for FE-Score (how good an investment the property is likely to be). You can then search in the city and all properties for sale will show on the map, color coded by FE-Score. You can also modify the search to use any financial criteria. It is quite amazing (if I do say so myself).

Robert T. Boyer, Ph.D
FinestExpert.com co-founder
http://www.FinestExpert.com
http://www.WJBHomeLoan.com
http://www.SanDiegosFinestRealEstate.com
http://www.Grandmaster.com
Web Reference: http://www.FinestExpert.com
0 votes Thank Flag Link Fri Dec 10, 2010
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