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utcsox
ParticipantCashman,
Sadly, your observation is correct. When RICH asians that want to send their children to United States for education, they like to send them to heavily Asian populated areas such as San Francisco, Los Angeles and New York. Since they are already spend tons of money to send their kids to get education in the United States, it is natural they will like to send them into areas with the BEST school district. In Los Angeles, that means areas such as South Pasadena, San Marino, Arcadia, Diamond Bars, PV and etc. You need to spend about $100K/year if you have two kids that are getting school in one of those areas. Housing cost (even Rent), housekeepers, Cars (BMW, Audi, MB.. you get the idea), air flight tickets for your kids and yourselves and other spending. Imagine, if you can afford to spend this much money on your kids getting education here, you don’t think they can easily buy a house for $1 million to $2 million? Those Asians usually buy the house with a lot of cash since they can’t get mortgage deduction from the US government. They are NOT your typical American home buyers. In my opinion, you cannot really analyze those areas with price and local income. It is VERY VERY clear that majority of those foreign buyers DO NOT work in the United States. I hope this information help.
September 25, 2007 at 10:12 PM in reply to: Carmel Valley – long time flipper house finally sold? #85920ParticipantIs the current price $675K still overpriced for this 2000 square foot SFH? If so, what is a reasonable price to purchase this property?
Participanttemeculaguy, I think we are looking from the different perspective. I am looking from a renter’s perspective and you are looking from the investor’s perspective. Factoring in the tax benefit, you are pretty much paying the same in buying or renting. Sure, bubble tends to over correct and you might time the market perfectly and buy it when it is cheaper to buy than rent. However; my point is it will start make sense to buy instead of rent the same property if the property is the rent multiplier reach 160.
ParticipantSome quick update on the Regents La Jolla Condo. The sale office was closed sometimes in the summer and according to the people who now work in the leasing office, the sale office will be back sometimes next month.
In my opinion, Regents La Jolla is one of the best condo conversion property in UTC. However; the price was ridiculously high before the sale office close. One bed room is going to cost you over $400,000 and 2 bedroom cost at least $500,000. If they are trying again to sale these units at this price in this market, I don’t think they will generate many sales.Participant“Can anyone explain what is rent multiplier 160. Thx” Granted, I am not an expert on this subject, but I will try my best to explain the concept of rent multiplier of 160. From what I understand is that the break even point between buying the property and renting the property is when the property price fall under 160 times the rent you expected to pay for the property. For example, if a condo unit can expected to generate the rent of $2000 per month, the break even point of this property is $2,000*160=$320,000. Anything under that is a solid buy. Please try the buy vs rent calculator and you will see the rent multiplier 160 works fairly well if your tax bracket is around 25% or 28%.
ParticipantJust curious, why do you guys think the the price will drop below $250k for 2 bedroom? Using the rent multiplier of 160, and assume the current market to rent a such a place is between $1600 to $1800 per month (closer to $1800), the value of such 2-bedroom apartment shall be $256,000 to $288,000 assuming the rent do not drop. Is there something wrong about my assumption?
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