The declining real estate market is a window of opportunity for many first-time buyers who have been waiting for the proper time to invest. However, some of them are doing it very differently than expected. Rather than finding the perfect home and stretching their finances to purchase and live in it it, they are staying in their WEHO apartments, especially those who are lucky enough to live in rent controlled units, and purchasing distressed properties in surrounding areas to use as rentals. This way, by putting 10-20% down and securing a 30 year fixed low interest loan, they can buy the property at a low enough price that their renters will build their equities for them. They will come out, eventually, with a solid real estate portfolio that they can use in later years to finally purchase that dream home. I would suggest a meeting with a good accountant before embarking on a venture such as this, to be sure that you are clear about how much you can invest, tax issues, and what kind of reserves you should have.
With more short sales and foreclosures happening every day, a quick search of the MLS this morning yielded these amazing figures for areas within a 1-1/2 hour drive from LA.
Canyon Country: 170 condos listed between $159,900 – $489,000, with 48 one-three BR units listed for less than $225,000. Upland: 68 two and three BR condos listed between $129,000 – $559,000. San Bernardino: 110 one-three BR condos listed between $79,900 – $349,900, and Riverside: 163 one-three BR condos listed between $99,000 – $449,000. That is only four cities. There are dozens of areas that have many foreclosures and short sales.
Prices like this, especially on the low side, make buying one or several condos a great option for a buyer with a little cash and the patience and daring to make lowball offers. Some will be rejected, but others will be accepted. Distressed sellers have to get out of those bad loans, and banks just cannot carry this much inventory for long, so they are motivated to make deals. Ask your Realtor for assistance.
So here it is. Opportunity is knocking, just not the way we all thought it would.
West Hollywood Guide 