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Category Archive: ‘Real Estate Investing’

Vacancy Rates

Buy rental properties! San Diego’s vacancy rate is also 2.9%, same as L.A.


https://calmatters.org/articles/frequently-asked-california-housing-crisis-questions-answered/

Posted by on Nov 16, 2017 in Jim's Take on the Market, Real Estate Investing | 0 comments

Cliffhanger

Hat tip to daytrip for sending this in – the price is now down to $699,000:

Homes near this Chapel Drive neighborhood fetch about $1.5 million, and Crowell priced this property as such. She figures it will cost $300,000 to stabilize the hill that got washed away during February’s rains, $250,000 to fully upgrade the 2,385-square-foot home and leave $100,000 left over for profit. “That’s the going price in this neighborhood,” she said. “The house is still near the best schools.”

The couple selling the house is in their 90s and were forced to move out of the home they’ve lived in since 1968 this winter. While the property underneath the home is shaky, Crowell said the four-bedroom, three-bathroom home is in really good shape.”

As of Monday, Crowell said she had at least 10 inquiries on the home. She said she felt supremely confident she’d sell it — and soon. But she fully recognized that anywhere else in the country, a Realtor who asked for nearly $1 million for a home sitting precariously on a landslide and “you’d be nuts.”

http://www.ktvu.com/news/red-tagged-lafayette-home-teetering-on-landslide-sparks-bidding-war-starting-at-850k

https://www.zillow.com/homedetails/21-Chapel-Dr-Lafayette-CA-94549/18468498_zpid/

Posted by on Oct 18, 2017 in Jim's Take on the Market, Real Estate Investing | 2 comments

Hurricane Flippers

Hat tip to Richard for sending this in:

LINK

An excerpt:

Addressing a real estate conference in flood-ravaged Houston this month, longtime investor Ray Sasser detailed his strategy: buy up to 50 flooded homes at deep discounts, then fix and flip them for a hefty profit.

Sasser first followed that game plan after Tropical Storm Allison flooded the city in 2001. He bought homes for 30 to 40 percent of their pre-storm value, spent another 15 percent on repairs, and sold many a year later – at full value.

The quick recovery surprised him, he said.

“This can’t be true,” he recalled thinking at the time.

The bet that home prices in hard-hit Houston neighborhoods will fully recover after Hurricane Harvey could be riskier, Sasser and local economists said. But a rush of investors eager to snap up flooded homes reflects broader confidence in the resilience of Houston’s unique metropolitan economy.

While the region’s unchecked development has come under fire for exacerbating flooding, it also reflects its core strength: A rare combination of rich job opportunities and low cost of living, driving explosive population growth in America’s energy capital.

The surging demand has sustained home prices through four major floods since 2001 and a historic oil price crash starting in 2014. Though Harvey caused far more damage than previous storms, investors such as Sasser see plenty of opportunity in the region’s estimated 268,000 flooded homes.

Tara Waggoner, the Houston market manager for brokerage and online listings firm Redfin, said the firm’s local agents were getting about four times the number of calls they usually get from investors. They ranged from individuals looking to buy one flooded house to groups of ten or more pooling their money for a home-buying spree, she said.

“You have people with millions of dollars to work with,” she said in an interview days after the storm. “They want to go in, pay cash, get the discount and fix it up to sell.”

Read full article here:

LINK

Posted by on Sep 22, 2017 in Flips, Frenzy, Jim's Take on the Market, Real Estate Investing | 3 comments

Renters On The Rise

My takeaways:

  1. Rents should be under intense pressure over the next few years.
  2. Growth of U.S. households since this blog began = about 8 million!
  3. The affluent are winning.

Hat tip to Kerry for sending this in!

LINK

Ten years after the U.S. housing market crashed, some things have gotten worse instead of better.

More U.S. households are headed by renters than at any point since at least 1965, according to new analysis of Census Bureau data by the Pew Research Center, a nonprofit think tank in Washington, D.C. “The total number of households in the United States grew by 7.6 million between 2006 and 2016,” it found. “But over the same period, the number of households headed by owners remained relatively flat, in part because of the lingering effects of the housing crisis.” And the rise in renters is significant, even accounting for the growth in the population over the last half-century.

The number of households owning their home has fallen since the peak of the U.S. property bubble in 2006, Pew found, while the percentage of households renting rose to nearly 37% last year from just over 31% in 2006. The 2016 rate is slightly less than the 37% in 1965. “Certain demographic groups ­— such as young adults, nonwhites and the lesser educated — have historically been more likely to rent than others,” Pew found. “However, rental rates have also increased among some groups that have traditionally been less likely to rent, including whites and middle-aged adults.”

Adults younger than 35 continue to be the most likely of all age groups to rent. In 2016, 65% of all households headed by people younger than 35 were renting, up from 57% a decade earlier. Last year, 41% of households headed by someone aged 35 to 44 were renting, up from 31% of all households in 2006. Rental households headed by someone aged 45 to 64 rose to 22% of all households in 2006 from 28% in 2016. But among baby boomers and the oldest Americans — those 65 or older — the rental rate remained steady at around 20%.

One reason so many people are renting: Only 45% of renters on average can afford the payments on a median-priced home in their area, according to a report on the state of housing from Harvard University’s Joint Center for Housing Studies released last June. Buying a house is even more out of reach for renters in expensive markets such as the West Coast, the Northeast and Florida. In these parts of the country, as few as 10% of renters could afford the mortgage payments if they bought a home, the report found. Economists recommend spending no more than 30% of gross income on housing.

LINK

Posted by on Jul 20, 2017 in Jim's Take on the Market, Market Conditions, Real Estate Investing | 3 comments

Australian Deals Under $2M

SQUALID dumps including completely unliveable houses are up for sale as the real estate market prepares for a “Super Saturday” of auctions.

The number of houses advertised for sale in Sydney is on a three-year high, reflecting a boom of 13 per cent since this time last year.

The larger selection of properties means buyers are “less likely to be blown out of the water by whopping great bids”, the Daily Telegraph reported.

And there is less competition for complete “fixer uppers”, crumbling, derelict old houses ready to be snapped up by brave renovators.

Real Estate Institute of NSW president John Cunningham said buyers could compete for homes this weekend with the pressure easing off a previously crowded field for a handful of homes.

Investors had begun to withdraw from purchases as banks restricted investment loans.  This put ordinary buyers in a stronger position to negotiate deals for houses with defects.


More deals here:

LINK

Posted by on Jul 16, 2017 in Jim's Take on the Market, Real Estate Investing | 1 comment

Windansea 4-Plex

Two new listings in La Jolla in two days!

The fourplex is 313-319 Nautilus, which is just seven doors up from the world-famous Windansea Beach.  They are similar 1-bedroom units, built in 1951 and recently renovated.  The rents range from $2,000 to $2,195 per month on annual leases.

It’s not even a 3 cap, so investors would have to appreciate the land value and proximity to the beach to make it worth it for them.  But there has been so much development nearby, we think the eventual buyer will tear it down and build new.

List price is $2,350,000, which is the appraised value.

Here is the property manager’s interior tour:

Beautiful remodeled one bedroom cottage steps to beach in best area of Windansea. Designer upgrades include tiled bath and kitchen- new fixtures, cabinets, counters and new stove, fridge, microwave and dishwasher plus all new flooring. This immaculate cottage is bright and sunny and comes with a Garage included. The unit has high open beam ceilings.

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Posted by on Jul 1, 2017 in Jim's Take on the Market, La Jolla, Real Estate Investing, Thinking of Building?, Thinking of Buying?, Why You Should List With Jim | 0 comments

Investor Financing For Flips?

Big-money investors are entering the real estate space, though not in California yet – but it’s just a matter of time.

Notorious R.O.B. explores whether there would be much difference between selling to an investor, and selling with a realtor on the open market:

http://www.notorious-rob.com/2017/06/are-investor-offers-always-worse/

But he also brings up a curious thought – what if the investors re-sell the house, and carry the financing for the buyer? An excerpt:

Longtime readers know that I think the most interesting possibility is that companies like Opendoor, Offerpad, and others are looking at revolutionizing the home financing process by offering direct seller financing to buyers. That was premised on the idea that these guys would resell their loans as private label RMBS.

What if they figure out a way to just hold on to the loans and service them directly in some fashion?

If investors were selling re-conditioned homes and offering to self-finance the purchase, they could bring in a whole new set of homebuyers that can’t get a loan now.  They wouldn’t finance just anybody, but they could pick up those who get left out of the current mortgage guidelines for silly reasons.  If they had sensible guidelines, they could even become the go-to lender – you just have to buy their house, at their price, to get their financing!

Creating a new buyer pool could keep the party going for a few more years!

Read Rob’s article here:

http://www.notorious-rob.com/2017/06/are-investor-offers-always-worse/

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Posted by on Jun 20, 2017 in Jim's Take on the Market, Real Estate Investing, The Future | 0 comments