I have done some real estate investing in the past, but now only own my residence. I live in San Diego and would like to get back into investing, but have a hard time finding anything due to the cost of property here.
The median home is over $500K and the median condo is almost $400K. It is really hard to make anything cash flow since most of the time you need to come up with around 50% to break even.
Am I wasting my time in this market? Or, do you have any ideas for RE deals?
I have thought about going in to different cities to invest. Cash flow is much easier elsewhere, but there is something about being close to home and knowing the city as well as I do which keeps me around here. I find it hard to invest in a city that I do not know, but I am willing to do it if that is what makes the most sense.
I am not interested in buying a piece of property and riding appreciation. I would like to add value in some way and turn around and sell it (quickly, or as long as it takes).
I have heard a lot of buzz about Texas. What would be the right move there? Swoop up some land and hold it for a couple of years? Or, do you think there is money to be made in rehabs and/or flipping? Do you know anything about the apartment market?
Amanson, yes, you are waisting your time looking for properties in CA for cash flow due to the high cost. As I said in the other thread, unless you already own in CA (I would hold on to it for appreciation), or you are lucky and found a bargain, or you are a millionare, look out of state. I’m from the Bay Area. It’s the same here. You can buy two properties in TX for the price of one here in CA. However you can flip in CA, as anywhere, as long as the market is right for flipping.
I will be flipping in CA and investing in TX focusing in the Dallas/Fort Worth area for cash flow properties. You shouldn’t flip out of your home area unless you have trusted contacts elsewhere, or unless you plan to be there in person. Too much traveling. I too am hearing a lot of buzz in TX. Lockheed Martin (biggest defense contractor is in Fort Worth). The US military will need to replenish their hardware from the Iraq war. There will be lots of job opportunity. Taxes are high in TX and people would rather rent. And if the 15% spurt in appreciation is true, then now is the right time.
What’s the problem with paying a property management company? As long as they are dependable and willing to work for you, I see nothing wrong with it. As long as the cash flow is good after all expenses have been paid, nothing wrong with it. If you have many properties with them, they will bend over backwards so they will get more. The most important thing is, you must pick one you can trust. If you don’t trust anyone, then investing out of your home market is not a good idea unless you are ok flying back and forth. If your market is too pricey, then the only thing you can do is flip properties. Just an opinion.