Buying condo in So CA, or go out-of-state

[cainvestor]

As we in the hot market, in order to get in REI, have any of us investing successfully in condo or Townhome?

The positive side is that these are new construction, easy to rent, require less investment, less maintenance.  The neg are   HOA free, HOA management quality, regulations,  less appreciation than SFH.

At the same time, I am also looking into out of state like TX -San Antonio, Dallas, Austin areas.  However one of the concern is tax rate there being 6%+ or so.  I will also look at OH, UT, OR, AZ for potential rental/income properties.  Anyone doing investing in those states can share some insight?

[wricg]

I am doing investing in resort condo conversions in FL and NV.

[SD Newbie]

Hey CAInvestor,

In regards to condos in CA, you may have to accept the idea of having negative cashflow since the rents usually dont cover the notes in CA...  BUT the silver lining is, how do you look at neg cashflow... If the note is 2K and the rents in the area are 1K that means you have a 1K neg cf per month, 12K for the year.  Here is where the thought process changes, if the condo cost you 310K, you hold it for a year and sell it for 380K and make 70K... minus the 12K equals 58K... there is nother negative about 58K... does that make sense...  Its all in how you look at money....

[wricg]

You do not have to accept a negative cash flow. I am doing a current resort conversion that offers a optional 24 month leaseback which is equal to 15% the sales price. I have guaranteed income for 2 years, that covers mortgage, HOA, Club Fees, Insurance, Taxes...those investments are out there.

[wricg]

and to boot, i get in below appraised value and because of the resort ammenities and waterfront locations, the resale (for me) has been aboe 160%, top that with 100% financing, i have no money out of pocket, 2 year income and resale for much higher price. I get so excited talking about this stuff...it has literally changed my life!

[SD Newbie]

You stated that your conversions were in FL and NV, CAInvestor is talking CA... I have heard of the ones in FL, they are pretty popular... And most of the REI I know in southern CA are either not interested in tieing up their money or they are already involved...

So good luck to you... How much does a person need to get in?

[wricg]

my apologies newbie, i got of on a tangent from a offline conversation on this topic, i did not re-read the posts (sorry)...
The inside investing group i am a part of has prefered position. I know you must have a CS above 700 (you can go unstated income). There are lenders that if you hold 100K in a non frozen account they will finance 100% up to 2M. The beauty is if you purchase units where the leaseback covers this, you can then take your initial capital out and use elasewhere and let the leaseback satisfy the bank. I have done this several ways, some 100% some 5% some 10% depending in the lending program i chose...

[niravmd]

i wouldnt advise investing in socal at all.
i live in san diego and am moving my stuff out of state.

if you invest here you face negative cashflow. prices have
gone up sky high and probably will be flat for the next several
years. so if the interest rates rise, you wont be able to sell,
the property will decrease and u're negative every month.
sure fire method to get to the poor house.

i looked at texas and didnt like it. in the past 25 yrs, house
prices have gone up 89%. meaning they didnt even keep
up with inflation. on top of that the tax rate is 2.5%

there are better states. keep on looking!

[wricg]

agree with niravmd, i have alot of freinds in CA that are looking elsewhere. Las Vegas was at 54% last year (boom), FL waterfront (alone) has been consistant at 24% over the past 18years. Keep looking you work to ahrd for you money to see it work mediocre for you...good luck investing

[niravmd]

problem with vegas is it has stalled since summer of 04. its not going up anytime soon.
NEXT!

[wricg]

Curious why you think it is not going up or stalled. Las Vegas is in a constant build tear down stage, you can not develop outside those city limits...appreciation was up 54% last year and continues to be a hot spot? What areas are you investing in?

[SANDIEGOMADNESS]

Hey brechbill...

Could you please explain that process to a beginner like myself?
Sounds very exciting and I am in San Diego like most others. We are looking to invest in TX and possibly AZ. Thanks for EVERYTHING!!
These rooms are a tiny goldmine of info!!

Kenny

[Las Vegas Real Estate]

Califonia is always a great investment if you can float the bill.  If you can't, a new construction anywhere is a good alternitinve.

[niravmd]

just because vegas is in a state of build up and tear down doesn't mean existing residential housing is being torn down and rebuillt every 2 yrs.
that segment of the market has been over built.

[wricg]

I will leave the forum with this, as I am now leaving vegas after purchasing an additional 2 units...when flood waters come all boats will rise  Have a great weekend everyone!