Looking to purchase property for investment with 100% down payment of about 200 K , what would u recommend considering rental return possibilities ?

Asked by Sudarshan Sathe, Edenvale, San Jose, CA Tue Dec 4, 2012

Looking to purchase property for investment with 100% down payment of about 200 K , what would u recommend considering rental return possibilities ?

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Sudarshan Sa…, Home Buyer, Edenvale, San Jose, CA
Tue Dec 4, 2012
I am not fixed on san jose .. Want bay area locations where rental returns can be better.
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Ron Thomas, Agent, Fresno, CA
Tue Dec 4, 2012
In FRESNO, there are 78 SFR, homes with at least 3 bedrooms, in nice neighborhoods, priced between $125 and $200.
Have you considered Fresno?
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Terri Vellios, Agent, Campbell, CA
Tue Dec 4, 2012
You want to pay all cash on a $200,000 property? What I recommend is to look at location as your number one factor. What will $200,000 buy you in the better location.

The reason is you get higher rent, better tenants, and a greater appreciation on location. Are you open to exploring areas outside of Santa Clara County? In Santa Clara County $200,000 is going to limited you to condos. You will want to review the monthly HOA fees which affect your ROI. Also, more and more condo communities are restricting renting the condo's out. So reviewing the HOA documents, minutes and newsletters are very important.

Rental are in high demand so your thinking of purchasing for a rental is a good one. There are so many questions I would be asking my investor before going forward and hopefully the Broker/Agent your select will ask you those questions so that you can make an informed decision.

Have an amazing day!
Web Reference:  http://www.terrivellios.com
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Ben Cyrus, Agent, SAN JOSE, CA
Tue Dec 4, 2012
Hi My buyer and I closed just one home of the same nature that you are asking last week. All cash and there were 4 other offers above our cash and the way I structred the offer we were successfully able to get the bank ( it was a bank owned or REO) accept our offer. On top of that I was able to get my buyer $6600 disconts.

Wish you all the best and success in your investing,
Ben Cyrus

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David Sciplin, Agent, San Jose, CA
Tue Dec 4, 2012
There are several factors that go into your decision other than just price.
The number of units matter because it helps you get more income for your investment and helps cover the bills when people don't pay rent.

Location of the property matters because neighborhoods that are nicer, safer and have better schools have a greater possibility of higher rents than a property in a less desirable area. These rentals also cost more to purchase.

The decision you're about to make takes more consideration than a few emails. You're biggest issue to address will be making sure the property has a positive cash flow.

If you'd like to schedule an appointment to talk about the possibilities, please give me a call.

David Sciplin
Web Reference:  http://www.davidsciplin.com
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Bill Mccord, Agent, San Jose, CA
Tue Dec 4, 2012
Hello Sudershan.
Please clarify your question.
It's not clear whether you are looking to buy a $200,000 property for cash, or put a $200,000 down payment on a more expensive property.
$200,000 cash would only buy one small cheap condo.
$200,000 down payment could buy one nice $1million house in a nice district, or 4 Condo's in other locations in the San Jose area, anything in between these 2 extreems i.e. 2 good Duplexes.
Good luck,
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Debra Tsai, Agent, Fremont, CA
Tue Dec 4, 2012
Thank you for the question.

There are not so many houses posted on the current market with 200K in bay area as my updated experience working with my clients now if your purchase amount is 200K.

Assume that your down payment is about 200K, I will suggest you get a property for the price range between 300-500K investment property since you need to concern about cap rate.

Moreover, locations or areas will be a big concern for renting and choosing a good tenant.

Best regards,

Debra Tsai Realty – Meeting Your Real Estate Needs
Debra Tsai, Broker
Short Sale Specialist
Certified Broker Price Opinion Resource
Tel: 408-966-0088
Email: debratsaimail@yahoo.com
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Sudarshan Sa…, Home Buyer, Edenvale, San Jose, CA
Tue Dec 4, 2012
I do not live in US neither i am US citizen though i hold a long term visa so getting loan would be slightly complicated thats why looking for right investment with full down payment . Price range can be a bit flexible .. If i am getting a good deal..
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Elena Talis, Broker, Palo Alto, CA
Tue Dec 4, 2012
You probably will do better financially if you use the $200K for the down payment and getting a loan. California for many years was an equity real estate market meaning that a huge portion of the return on your investment is due to the property appreciation, not rental income. Buying a single family home in a better neighborhood will get you better quality tenants and better appreciation of the property value.
Web Reference:  http://talisrealestate.com
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Tina Lam, Agent, San Jose, CA
Tue Dec 4, 2012
If you're looking to invest about $200K, then about the worst thing you can buy is a duplex/4-plex. Those generally net 4-5%, offer little appreciation and are a headache to manage.

If you're looking at return returns on a cash deal, you can expect to get about 8% net cash returns after all expenses with 10-20% appreciation. With prices going up this year, it's no longer easy to get net 9-10% cash returns in San Jose.
Web Reference:  http://www.archershomes.com
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Norman Aless…, Agent, San Jose, CA
Tue Dec 4, 2012
I'm not quite sure, are you purchasing with all cash or are you getting a loan with 200k down.
In either case you would look for rental returns. This goes hand in hand with location. If it is a 200k purchase I would look for a good condo in the best are I can afford.
If you have any questions or need help please feel free to contact me.
At your service,
Certified Distressed Property Expert
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Lamson Dang…, Agent, San Jose, CA
Tue Dec 4, 2012
Dear Sudarshan Sathe,

It's OK to buy a Townhouse/Condo within $200,000 and rent it out. However, I would think the best could be buying a Duplex/4-flex. If you have income to support the new loan, then use $200,000 for initial investment/down-payment.
You can visit my website and read market review for these types of properties in San Jose.
Best wishes,

Lamson Dang
Web Reference:  http://lamsondang.com
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