San Diego Inventory Sucks…

[NicMM]

Hi Flu or other piggs,

Are you interested in buying a rental property? I have a one with excellent cash flow. A two bedroom townhouse built in 80s. Monthly rent is $1200. HOA + water bill is about $310.Currently property tax is $1300. The current lease will be expire on Feb 22nd 2013. Tenants probably will extend the lease.

Since my family moved to Bay Area and it is such a crazy place for housing. We need funds to make a purchase here. So I am considering about selling it around $100k (if all cash).

If you are interested, please PM me.

NicMM

[Coronita]

[quote=NicMM]Hi Flu or other piggs,

Are you interested in buying a rental property? I have a one with excellent cash flow. A two bedroom townhouse built in 80s. Monthly rent is $1200. HOA + water bill is about $310.Currently property tax is $1300. The current lease will be expire on Feb 22nd 2013. Tenants probably will extend the lease.

Since my family moved to Bay Area and it is such a crazy place for housing. We need funds to make a purchase here. So I am considering about selling it around $100k (if all cash).

If you are interested, please PM me.

NicMM[/quote]

Yes. sending ou a PM.

Funny you should mention that Bay Area. Yeah, things are much worse there…

[CA renter]

[quote=livinincali][quote=flu]I think people (with funds to invest) are looking for better returns, and with your traditonal “safe” investment being pidly 1,2,3%…People are just itching to take on slightly more risk for slightly more return.

And for that, some people think it’s RE..

For most people, putting money into the stock market is still to risky and volatile and while we were seeing decent returns this year on boring indexes (11-13% ), it’s not something that necessarily is sustainable each year…

So I don’t see this changing…People are saying once rates go up on mortgages, home prices will crater. I’m not so sure…So many factors….My gut tells me it depends on how RE performs relative to other things… For instance, if the equity markets tank, people will probably still be looking at RE as good bet. Risk/return for most people on stock market is still too high I think…[/quote]

It’s pretty obvious that single family housing is becoming a target for investment by non-traditional sources. The two biggest issues I see with that is #1 they don’t really want to be there. They’d much rather have a nice safe CD or Bonds that yields 5% but since they can’t find that return they are being forced into what is perceived to be a safe yield investment in RE. Is is safe to assume vacancy will remain low and rents will remain sticky? Probably but who knows.

The second is they lack experience being landlords. They think I’ll get a management company and collect checks in the mail every month. The problem is that landlording tends to be more complicated than that and involves actual work. Getting a 8-9% cap rate requires you to do some work to earn it.

I think the biggest key for the long term appreciation in housing is the wherewithal of all these freshly minted real estate investors. Will they stick it out until their tenants can afford to buy them out at a profit, or will they grow frustrated and liquidate.[/quote]

Ding, ding, ding!!!

And this is why higher interest rates will decimate the housing market, IMHO. Not only will it increase carrying costs for the buyers, but all of the “all cash” investors of the past ~4-5 years will vanish from the market if they can get better yields on bonds.

The low rates are also pulling some owner-occupied buyers into the housing market who might not otherwise be buying right now. For ourselves, we had to weigh what we were making on bonds vs. the “savings” we’d get by buying instead of renting. For a few years, our passive income was more than covering our rent, but when all of our bonds were called or matured, we were left with <1% returns on shorter-term options (always laddered and kept things in shorter-term options because we knew we wanted to buy a house at some point and wanted to be able to act when the opportunity arose). The pros and cons of renting vs buying kept us pretty firmly planted on the fence, but the low interest rates pushed us off entirely. We know a number of other families who are/were in the same boat.

[spdrun]

Except that lower home prices will increase cap rates as well, assuming rents stay constant. Making housing STILL a good investment.

[an]

I’m looking forward to the day I can pick up sfr in my hood for 50 cents on the dollar because rates rises 100%. Any chance that will happen?

[Coronita]

[quote=AN]I’m looking forward to the day I can pick up sfr in my hood for 50 cents on the dollar because rates rises 100%. Any chance that will happen?[/quote]

mmmmmmmmm hahahahahahahahaha
hahahahahahhhah
ahahah
ahahahahahahahh

Since everything will be on sale at 50cents on the dollar, I’ll be buying in Del Mar and La Jolla

Until then….QE4 here we come…

http://finance.yahoo.com/blogs/breakout/fed-finale-end-operation-twist-start-qe4-183055950.html

[an]

[quote=flu][quote=AN]I’m looking forward to the day I can pick up sfr in my hood for 50 cents on the dollar because rates rises 100%. Any chance that will happen?[/quote]

mmmmmmmmm hahahahahahahahaha
hahahahahahhhah
ahahah
ahahahahahahahh

Since everything will be on sale at 50cents on the dollar, I’ll be buying in Del Mar and La Jolla

Until then….QE4 here we come…

http://finance.yahoo.com/blogs/breakout/fed-finale-end-operation-twist-start-qe4-183055950.html%5B/quote%5D
Damn QEx… I was sooooo looking forward to pick up a few SFR rental at 50% off. I could have sworn on this board, back in the 2008ish, someone was saying I can be picking up SFR in MM for low 200k.

[CA renter]

[quote=AN][quote=flu][quote=AN]I’m looking forward to the day I can pick up sfr in my hood for 50 cents on the dollar because rates rises 100%. Any chance that will happen?[/quote]

mmmmmmmmm hahahahahahahahaha
hahahahahahhhah
ahahah
ahahahahahahahh

Since everything will be on sale at 50cents on the dollar, I’ll be buying in Del Mar and La Jolla

Until then….QE4 here we come…

http://finance.yahoo.com/blogs/breakout/fed-finale-end-operation-twist-start-qe4-183055950.html%5B/quote%5D
Damn QEx… I was sooooo looking forward to pick up a few SFR rental at 50% off. I could have sworn on this board, back in the 2008ish, someone was saying I can be picking up SFR in MM for low 200k.[/quote]

Why didn’t you pick up some of the 50% off deals in 2008-2011? There were quite a few of them around — not sure about MM, but they were there in many of the areas I follow.

[an]

[quote=CA renter]Why didn’t you pick up some of the 50% off deals in 2008-2011? There were quite a few of them around — not sure about MM, but they were there in many of the areas I follow.[/quote]
That’s exactly it, not in MM. I’m still waiting for 50% off in MM, which mean most SFR would have to be around 250k. The best areas in MM should be in the low to mid 300k but they only got as low as high 400k. BTW, who said I didn’t pick some up?

[Coronita]

[quote=AN]
Damn QEx… I was sooooo looking forward to pick up a few SFR rental at 50% off. I could have sworn on this board, back in the 2008ish, someone was saying I can be picking up SFR in MM for low 200k.[/quote]

Maybe the way I’m looking at it is wrong but I’d like to think in terms of 5 year increments..

1. Investing $140k @ 1% for 5 years produces $7141.

2. Buying a MM condo @ $140k produces an annual income (roughly) of $9200, or $46000 in 5 years.

Wouldn’t property value have to fall more than 27.8% before #1 being better than #2?

How likely is property values gonna fall an additional 27.8% in MM from this point?

[an]

[quote=flu]Maybe the way I’m looking at it is wrong but I’d like to think in terms of 5 year increments..

1. Investing $140k @ 1% for 5 years produces $7141.

2. Buying a MM condo @ $140k produces an annual income (roughly) of $9200, or $46000 in 5 years.

Wouldn’t property value have to fall more than 27.8% before #1 being better than #2?

How likely is property values gonna fall an additional 27.8% in MM from this point?[/quote]
You also haven’t count in the principal the tenant paid down over that 5 years. Then there’s the tax advantages.

It also depend on whether you’re looking for a short term income or long term income. For me, investment income is more important for when I retire than today.

[SmellsFeeshy]

[quote=flu]Funny you should mention that Bay Area. Yeah, things are much worse there…[/quote]

Tell me about it. Since I moved up to the Bay Area all I hear are stories about bidding wars with all cash offers, no contingencies and houses selling in a matter of hours.

Looking for inventory on the Peninsula is practically non-existent. Doing a search for condos 2/2 under $600k lands me maybe 10 results or less.

If you ever want to sell your house up here let me know ;).

[an]

[quote=SmellsFeeshy]Tell me about it. Since I moved up to the Bay Area all I hear are stories about bidding wars with all cash offers, no contingencies and houses selling in a matter of hours.

Looking for inventory on the Peninsula is practically non-existent. Doing a search for condos 2/2 under $600k lands me maybe 10 results or less.

If you ever want to sell your house up here let me know ;).[/quote]Sorry to hear about your frustration. That’s my experience as well when I considered moving up there a few years back. The cost of living increase far out weight the income increase. Which is why I decided to stay. I said this in another thread awhile back. It seems like it’s worse now. A 2/2 in SD near work center can easily be had for $200-300k. So, you’re looking at cost of living that’s 2-3x more but income is only at most 25-30% higher (that’s also before tax).

[an]

dup.

[Coronita]

[quote=SmellsFeeshy][quote=flu]Funny you should mention that Bay Area. Yeah, things are much worse there…[/quote]

Tell me about it. Since I moved up to the Bay Area all I hear are stories about bidding wars with all cash offers, no contingencies and houses selling in a matter of hours.

Looking for inventory on the Peninsula is practically non-existent. Doing a search for condos 2/2 under $600k lands me maybe 10 results or less.

If you ever want to sell your house up here let me know ;).[/quote]

I always recommend to always keep property in the Bay Area.

[Author]

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