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Category Archive: ‘Real Estate Investing’

Investors Going Further Out

Housing recovery pushes investors into more remote areas to find deals, with more looking to flip properties, C.A.R. survey finds

LOS ANGELES (Aug. 20) – Given the depletion of distressed homes on the market, investors are changing their strategy and are moving away from purchasing homes in more popular, urban areas in favor of more rural areas of the state where better deals can be found, according to a CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) investor survey.

In 2014, nearly half (45 percent) of investors said they purchased properties in such counties as Sacramento, San Joaquin, Fresno, Kern, Merced, and Tulare, up from 27 percent in 2013, C.A.R.’s “2014 Investor Survey” found.  Fifteen percent of investors purchased properties in Northern California in 2014, down from 27 percent in 2013, and 40 percent purchased properties in Southern California in 2014, down from 50 percent last year.

Additionally, with home prices on the rise, more investors are flipping properties instead of renting them.  In 2014, 28 percent of investors flipped the property, up from 20 percent last year. Fifty-eight percent of investors rented their properties in 2014, down from 73 percent in 2013.

More than eight out of 10 investors (83 percent) own other investment properties, with 7 percent owning more than 10 properties, 17 percent owning 6-10 properties, 47 percent owning 2-5 properties, and 12 percent owning one other property.

Among the reasons investors cited for buying now include profit potential (cited by 58 percent), good price (43 percent), location (26 percent), personal (21 percent), and low interest rates (14 percent).

The median sales price of an investment property in 2014 was $320,000, up 9.6 percent from $292,000 in 2013, reflecting increasing home prices and fewer available distressed properties over the past year.

Additional findings from C.A.R.’s “2014 Investor Survey” include:

• Reflecting the recovering housing market, the majority of investment properties purchased (70 percent) were equity sales, while 18 percent were short sales, and 12 percent were foreclosures. • More than two-thirds (67 percent) of investors paid cash • One-third of investors were foreign investors, with China, Mexico, Taiwan, and India being the top countries of origin. • While most investors made minor or no repairs to the properties, the percentage of those who did major remodeling nearly doubled from 9 percent in 2013 to 17 percent this year. • Investors spent more on remodeling costs in 2014, putting a median of $15,000 into the investment property, up 50 percent from $10,000 in 2013. • Investors own an average of 8.3 properties in 2014, up from 6.5 properties last year. • More than half of investors (55 percent) intend to keep the property less than six years.

California Investor Survey Slides (click links to open):

More investors are buying in remote areasMedian price of investment propertiesTwo-thirds of investors paid cashIntended use of property Top five reasons for buying

C.A.R.’s “2014 California Investor Survey” was conducted in May 2014 in an effort to learn more about the role of investors in the California housing market.  The survey was emailed to a random sample of REALTORS® throughout California who had worked with investors within the 12 months prior to May 2014.

For complete survey results, visit www.car.org/marketdata.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Posted by on Aug 20, 2014 in Real Estate Investing | 2 comments

More Real Estate Crowdfunding

sharestates

Once crowdfunding for real estate catches on, we could see a whole new type of bubble – one that is less personal and investors can shrug off - From BI:

In the current environment of low interest rates, investors are scrambling for  yield, and many have turned to real estate.

Typically investors buy and flip homes, or they invest in real estate  investment trusts (REITs), which own different types of properties.

But Sharestates is offering both accredited investors and the public a real  estate crowdfunding platform that lets them dip as little as $100 into a  project. The idea is to bring real estate to the masses.

Read more:  http://www.businessinsider.com/sharestates-the-e-trade-of-real-estate-2014-8

This is the company they featured:

https://www.sharestates.com/

Posted by on Aug 9, 2014 in Real Estate Investing | 4 comments

‘Anti-Speculation Tax’

The attack on Prop 13 should be next….from the sfgate.com:

http://www.sfgate.com/politics/article/Tax-to-brake-S-F-real-estate-speculation-headed-5558857.php

Supervisor Eric Mar and tenant activists unveiled a ballot measure Tuesday that would impose a steep tax on investors who sell an apartment building within five years of buying it, a proposal they said is aimed at reigning in real estate speculators who are helping to drive up housing prices by flipping rental properties.

The “anti-speculation” tax, which would apply solely to smaller, rent-controlled, multi-unit buildings, will join several other housing measures on an already-crowded November ballot. It asks voters to approve a graduated tax that decreases the longer an owner holds onto a property – starting at 24 percent of the selling price if a building is sold within a year of purchase, falling to 14 percent at five years and disappearing in the sixth year.

The measure exempts single-family homes, condos, owner-occupied tenancies in common, properties not being sold at a profit, new construction, properties being turned into affordable housing, and buildings with more than 30 units.

“This is a serious situation we are in – the unstable housing costs in the city, even the average cost of a rental unit is so out of whack right now and it’s driven … by wealthy, powerful interests who are flipping apartment buildings and making a lot of money quickly,” said Mar. “This will slow down or stop the flipping by greedy speculators, help ensure more of a balance of housing in the city, and hopefully address the out-of-whack, super increase in apartment rental prices right now.”

http://www.sfgate.com/politics/article/Tax-to-brake-S-F-real-estate-speculation-headed-5558857.php

Posted by on Jun 17, 2014 in Prop 13, Real Estate Investing | 2 comments

Happy Easter

sunriseHT – Daytrip, Happy Easter to you and your family!  A story about buy-and-hold, which is highly recommended (buy as many houses as you have kids, in case prices get way out of hand).

http://www.latimes.com/business/la-fi-first-time-landlords-20140405,0,5071734,full.story#axzz2zOvSJDIv

An excerpt:

Buyers who bought at the bottom of the market in 2009 got a bargain. Then  came years of opportunity to refinance into record-low interest rates. That  means many owners can rent out their home for more than it costs them each  month, even with taxes and other ownership costs figured in.

With the tenant covering the note, they can build equity — especially if home prices continue to rise.

“It’s a market-based decision,” Henson said. “They know they can get really  high rents right now. If I’m locked in on a 30-year fixed [mortgage] at 4%, and  if home values are going up, it can make a lot of sense.”

It did for Brian Darcy. The 36-year-old and his wife recently moved to North  Carolina to be closer to her family. Instead of listing their three-bedroom in  Manhattan Beach for sale, they signed with First Light and put it up for rent.  Within a week they had a tenant and a lease that paid more than enough to cover  the mortgage, Darcy said.

“The confluence of events kind of blew my mind,” he said.

Darcy and his wife bought the house in 2010 and always planned to move to  something bigger. With two growing children and regular visits from relatives,  it was getting to be that time. But the houses they were eyeing in Manhattan  Beach were going up in price just as fast as theirs was.

They had enough savings for a down payment in North Carolina, and he could  work from there as easily as in California. So off they went. They’re looking  for houses now and finding that their money will go a lot farther in their new  home.

The timing, Darcy said, couldn’t have been better. He estimates that his  house in Manhattan Beach is worth one-third more than he paid for it four years  ago, and he refinanced into lower interest rates. Now rents are rising.

“We bought at a good time,” Darcy said. “That’s what makes the mechanics  work.”

Many of the new landlords are affluent and financially savvy, Haberle said.  They’re not necessarily in it for the long haul, but they see a chance to profit  right now.

“These amateur landlords aren’t people who are doing this for a living,” she  said. “They just kind of happened into this opportunity.”

If this trend holds, it could mean even fewer homes for sale in an already tight market.

Read full story here:

http://www.latimes.com/business/la-fi-first-time-landlords-20140405,0,5071734,full.story#axzz2zOvSJDIv

Posted by on Apr 20, 2014 in Real Estate Investing | 2 comments

Dear Frustrated Buyer

Buyers are grabbing up everything in sight – what do you do?

dealing with insanityBe patient, commit to a price point, subtract up to $100,000 for repairs/improvements, know what/where you are willing to compromise, and buy the next good one!

It’s only sticks and stucco, you’re the one who makes it a home.

Let me help you!

Posted by on Mar 24, 2014 in Bubbleinfo TV, Encinitas, Frenzy, Jim's Take on the Market, Klinge Realty, Real Estate Investing, Why You Should Hire Jim as your Buyer's Agent | 4 comments

UTC 2br/2ba Condo

Here’s a great buy for those looking for an attractive top-floor condo with gleaming hardwood floors, vaulted ceilings, 2 garages, plus new carpet and paint – all for only $395,000!

The last sale of this model was $418,000 in December.

Conveniently located between La Jolla and the UTC mall, similar units have been advertised recently for $2,000 to $2,200 per month in Craigslist:

Across the street from this complex is a Vons shopping center that also has a Starbucks, Sushi, Shanghai Cafe, Leucadia Pizzeria, yoga, dentist, Tapioca Express and more!

https://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=76

Posted by on Mar 19, 2014 in Bubbleinfo TV, Real Estate Investing | 2 comments

More on Crowdfunding

Lots of potential, but do your homework! An excerpt from marketwatch.com:

Crowdfunding in real estate comes in two flavors: tangible properties and personal mortgages.

The first is a platform where clients can browse vetted property deals, like a plan to turn an old industrial site into luxury apartments. Then, you choose what you want to invest in. Some platforms also allow you to purchase shares in existing properties and later sell your real estate ownership to other investors on the platform, providing a possible avenue for liquidity. Primarq is among the few focused solely on the residential side, enabling investors to own part of residential homes along with the actual resident of the property, and to participate in any appreciation in the home’s value.

Whereas you could spend countless hours investigating properties on your own to make a buying decision, these online platforms conduct the due diligence for you and strive to put forward quality property deals for their clients to choose from. Fees vary depending on the project and the crowdfunding firm, but typically include an upfront fee for a successful funding round with an additional annual 1% fee on your investment amount.

Some sites, like RealtyShares, charge the borrower and not the investor. Another site, GroundFloor, doesn’t currently charge any fees, but that could change. Be careful about sites that say there are no fees to join or to view investments but that may have fees once you make an investment.

Members of some sites, such as Collaperty, can write reviews. Login access or dashboards may feature performance reports and updates on your investments.

Perhaps the most intriguing aspect for those small investors is that this presents a way to get in on the ground floor. “Getting into an investment when one investment changes from one hand to another isn’t as lucrative as getting in early, on the ground floor,” Easterbrook points out.

http://www.marketwatch.com/story/how-to-use-crowdfunding-to-invest-in-real-estate-2014-02-07

Posted by on Feb 11, 2014 in Real Estate Investing | 3 comments