Real Estate... is this a buy?

[bond tr4der]

A 50% drop in price and it still just barely makes sense as an investment... not a bargain... just a deal.

It's amazing how over heated the RE was.

$70,000 is the listing price. $60,000 is a possibility since the bank, too, is getting raped on insurance, taxes and HOA fees.

 

[brokerboy]

A lot of guys who do this buy the home, repair it and refinance it for the whole price. It’s an income LLC business. I don’t think a lot of you guys belong in this business on a 200k home. If you make a good living or have savings it’s not worth your time. If you’re a small guy with big dreams remember the bank charges monthly payments even if you can’t rent it. Also remember it can take many months getting someone out of your home. Also if you have to sue for rent odds are you won’t get it poor people don’t have money.

 

[jcampbell]

Don't be too eager to buy rentals just yet - things will still get better (for positive cash-flow that is).

At least in California, people need to brace for the wave of option ARM resets scheduled for 2009 (although original estimates have been slightly reduced due to rates dropping and their new rates allowing for reduced pymts).

Check this out:

http://money.cnn.com/galleries/2008/fortune/0812/gallery.worst_markets.fortune/index.html


CA holds 8 out of the top 10 WORST markets for 2009!
:eek:

 

[yip1997]

Quote from scriabinop23:

Vista 92083 there are a few properties. You'll need to renovate a little, but they are around 1%... 92078 and 92069 (San Marcos) has a few that are slightly below 1%.

You have to look for the segments of the market that were the predatory subprime breeding ground.

Thanks, though they are not the area i want to stay when i move.

 

[pat9966]

I actually don't think zboy2854a got such a great deal. He is making an approximately 10% unlevered return on a SFR that probably has a shaky tenant. Hollywood, FL is part of South Florida which if it's not already there is going into depression. He's going to see his rents fall significantly year to year. Especially given the thousands of new single family and condo units that will be flooding the market as construction finishes and foreclosures continue. Would you rather live in a brand new condo or house for $2700 or an old one? Also, since he owns just a couple SFRs, all he needs is one bad tenant for his whole year to be screwed, as brokerboy explained. He has no economies of scale. That's why you never see people building fortunes on renting SFRs. If you want to be in the rental game you've got to own apartment complexes so that the good tenants average out the bad tenants and you can spread your management costs over many units. Anyway, good luck to him.