I am thinking of getting into 4-unit apartment or duplex,fourplex in So CA market: Riverside, San Bernardino, LA, or Orange.
Is this the good time get into hot market, or should I look elsewhere? Pro and Con for this market?
Caininvestor,
I was thinking the same thing, but not in the same location as you. I am new to RE investing myself, and concerned if the bottom of the hot RE market is going to fall out. But then the almighty wood-burning brain started, and I thought… You purchase a 3 family house for 300,000 and you are making a 500 profit per month. The bottom falls out of the market and in a worst case scenario the house is now worth 150,000 but your rents haven’t changed because there still is a demand for apartments. Granted that people will then go out an purchase houses at prices like that, but for houses to fall down that much in value, the mortgage interest has to go up to like 12%.
Eventhough your house is only worth 150,000 you are still bringing in a 500 monthly profit. You just will not have any equity in the house. In the long run eventually the value of the house will increase and you will build up equity.
I would like to see what everyone else has to think about this.