Temecula’s falling knife :)

[gn]

Cash positive rentals don't last very long in any market.

Temeculaguy, you make a good point.

Now, I think that rents will go down in Temecula. That's because the glut of houses will attract cash-flow investors which will increase the rental supply, thus, result in lower rents.

So, the fact the numbers currently "pencil out" doesn't mean that they will "pencil out" in 2009. This is especially true in places like Temecula where there is so much excess inventories & builders are still building.

 

[gn]

Cash positive rentals don't last very long in any market.

Temeculaguy, you make a good point.

Now, I think that rents will go down in Temecula. That's because the glut of houses will attract cash-flow investors which will increase the rental supply, thus, result in lower rents.

So, the fact the numbers currently "pencil out" doesn't mean that they will "pencil out" in 2009. This is especially true in places like Temecula where there is so much excess inventories & builders are still building.

 

[gn]

Cash positive rentals don't last very long in any market.

Temeculaguy, you make a good point.

Now, I think that rents will go down in Temecula. That's because the glut of houses will attract cash-flow investors which will increase the rental supply, thus, result in lower rents.

So, the fact the numbers currently "pencil out" doesn't mean that they will "pencil out" in 2009. This is especially true in places like Temecula where there is so much excess inventories & builders are still building.

 

[4plexowner]

What would I pay right now for a $1500/mo rental?

For starters, it isn’t a $1500 rental it’s a $1300 rental because of the HOA (and as an investor I have very little control over future increases to this HOA fee)

I prefer using annual rents – $1300/mo X 12 = $15,600/yr

Based on most RE investing books paying 8 to 10 times annual rents is a pretty safe bet

Because of the current market dynamics and the fact that I expect rents to decrease in the future, I would only pay the lower end of this range – 8 X $15,600 = $124,800

Because I know the current state of the market I would try to take advantage of the ability to pay cash so this would be my offer on this property:

$100K cash – 14 day escrow – no contingencies – take it or leave it

[4plexowner]

What would I pay right now for a $1500/mo rental?

For starters, it isn’t a $1500 rental it’s a $1300 rental because of the HOA (and as an investor I have very little control over future increases to this HOA fee)

I prefer using annual rents – $1300/mo X 12 = $15,600/yr

Based on most RE investing books paying 8 to 10 times annual rents is a pretty safe bet

Because of the current market dynamics and the fact that I expect rents to decrease in the future, I would only pay the lower end of this range – 8 X $15,600 = $124,800

Because I know the current state of the market I would try to take advantage of the ability to pay cash so this would be my offer on this property:

$100K cash – 14 day escrow – no contingencies – take it or leave it

[4plexowner]

What would I pay right now for a $1500/mo rental?

For starters, it isn’t a $1500 rental it’s a $1300 rental because of the HOA (and as an investor I have very little control over future increases to this HOA fee)

I prefer using annual rents – $1300/mo X 12 = $15,600/yr

Based on most RE investing books paying 8 to 10 times annual rents is a pretty safe bet

Because of the current market dynamics and the fact that I expect rents to decrease in the future, I would only pay the lower end of this range – 8 X $15,600 = $124,800

Because I know the current state of the market I would try to take advantage of the ability to pay cash so this would be my offer on this property:

$100K cash – 14 day escrow – no contingencies – take it or leave it

[4plexowner]

What would I pay right now for a $1500/mo rental?

For starters, it isn’t a $1500 rental it’s a $1300 rental because of the HOA (and as an investor I have very little control over future increases to this HOA fee)

I prefer using annual rents – $1300/mo X 12 = $15,600/yr

Based on most RE investing books paying 8 to 10 times annual rents is a pretty safe bet

Because of the current market dynamics and the fact that I expect rents to decrease in the future, I would only pay the lower end of this range – 8 X $15,600 = $124,800

Because I know the current state of the market I would try to take advantage of the ability to pay cash so this would be my offer on this property:

$100K cash – 14 day escrow – no contingencies – take it or leave it

[patientlywaiting]

I concur with you, 4plex.

People don’t realize that property management is work and your time is not free. You either do it yourself or pay someone to do it for you.

[patientlywaiting]

I concur with you, 4plex.

People don’t realize that property management is work and your time is not free. You either do it yourself or pay someone to do it for you.

[patientlywaiting]

I concur with you, 4plex.

People don’t realize that property management is work and your time is not free. You either do it yourself or pay someone to do it for you.

[patientlywaiting]

I concur with you, 4plex.

People don’t realize that property management is work and your time is not free. You either do it yourself or pay someone to do it for you.

[patientlywaiting]

I concur with you, 4plex.

People don’t realize that property management is work and your time is not free. You either do it yourself or pay someone to do it for you.

[ocean]

4-plex……you are one tuff negotiator…..100k???????
I’ve been a broker since 73,seen a few of these downturns,granted,this one feels like the big one,But I don’t see the properties dropping that far.History has shown that 10 times the gross on houses is about as far as it usually goes…..but hey…it might be different this time……actually I hope you are right….

[ocean]

4-plex……you are one tuff negotiator…..100k???????
I’ve been a broker since 73,seen a few of these downturns,granted,this one feels like the big one,But I don’t see the properties dropping that far.History has shown that 10 times the gross on houses is about as far as it usually goes…..but hey…it might be different this time……actually I hope you are right….

[ocean]

4-plex……you are one tuff negotiator…..100k???????
I’ve been a broker since 73,seen a few of these downturns,granted,this one feels like the big one,But I don’t see the properties dropping that far.History has shown that 10 times the gross on houses is about as far as it usually goes…..but hey…it might be different this time……actually I hope you are right….

[Author]

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