I am currently renting a brand new 3000 sq ft home for less than half of what it would cost to own. I returned to San Diego after 8 yeras on the East Coast in 2004 and decided that the housing market was way out out whack for the fundamentals and renting would be my best option until the market corrected. BTW, I made a nice profit on a home on the East Coast so I had the option to buy here.
With this stated, I’d like to share my first RE purchase experience in San Diego back in 1983. I rented a SFH in Mt Helix from a private owner. After about 3 months in the house my wife answered a knock at the door while I was at work. A foreclosure notice was being posted as the owner was in default. This ‘owner’ it tunrs out had quite a history. The RE market was down at the time and he was taking over properties from owners that were desparate to sell by giving them a 2nd TD and taking over their 1st. Problem was, he had about 18 of these properties and he made his money by renting the homes out, collecting the rents and not paying on the 2nd or the 1st.
To make a long story short, we researched the loan history, found the original seller and holder of the 1st back in Maine and offered a buyout of the property. We purchased the 2400sq ft home for $126k with an appraisal and realsistic market value of $180k. I also remember quite well the market in the early 90’s. I lived in Alpine at the time and remember a beautiful development, Ranch Palo Verde, where about 50% of the brand new homes were REO’s for a number of years. I have no doubt we will soon see the return of REO’s in new developments with overgrown brown weeds in place of landscaping.
Moral of the story- there will always be opportunities in any market.
