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02-06-2013 11:11 AM
I am looking to buy an investment property in Stockton /Antioch area
Wanted to get a feeler if it is still a good idea since prices in these areas have already gone up from last year.
Any other places people are considering as an up and coming market...Please share
02-06-2013 05:32 PM - edited 02-06-2013 06:55 PM
How about Santa Cruz?
rents are high in Santa Cruz, i.e. I advertised a 2-BR townhome for $2250 and had a lot of interest (20+ parties within a week) and several qualified applicants ($10k+ monthly income)
Santa Cruz is a bit behind on the curve compared to Santa Clara County. When the Santa Clara County RE market already took off in 2012, Santa Cruz was still dropping. I would say the bottom in Santa Cruz was probably summer 2012.
I sold a flip property in May 2012 for $480k to a down-sizer, and the buyer decided a few months later that it was too small for them. They relisted it and it sold in December 2012 for $530k.
The market below $700k turned first and the prices have gone up there.
The market $700k-$2mm is still weak, but I hear there is more action now. I only hear it because I have nothing for sale right now.
In the $2mm+ market, you can still get unbelievable deals. I am talking about 1999 prices. I wrote an article here:
Their neighbor is now listed:
This property has phenomenal views, high quality of construction, kitchen is maybe dated.. but very functional. I toured this house. Very nice property, just a bit limited on parking .. guess house has more parking than the main house. 2nd unit on top of garage, detached 3rd unit a mile away (on the same parcel!.. yes.. it's spacious)
Sold in 1990 for $1.3mm
Sold in 2001 for $4.2mm
Now asking only $2.2mm
You can buy at 50% of the 2001 price! The neighbor sold in 2011 for $5750k..
The best deal I saw was a short sale about 2 months ago.. main house had 3500 sqft, 6 car garage, barn, guest house of ~2000 sqft, built in the 1990ies, on .. I believe 7 acres, in Scotts Valley. (Best schools in the County.)
This should be $2mm easily.. it was offered for $750k and went pending.. issue is, the 2011 rain had caused a land slide and the *public* main road to the property had to be closed. There is a smaller back road. But, as a consequence, supposedly a fire truck cannot access the property. --> Fire insurance is not available, cash offers only.
Do you want to put $750k on a house and pray for no fire? As soon as the County has money to fix the road, this one will be worth $2mm again or more. This is the ultimate RE gamble.
So, if you want to buy cheap rentals, you are probably a bit too late for the *best* deals, but with today's interest rates, it can sort of work..
The luxury properties are still way depressed, but they don't make sense as rentals. Great potential for appreciation, but it's a gamble.
02-06-2013 05:40 PM
here is the link of the $750k short sale
I had remembered some numbers wrong..
sold in 2004 for $1765k
neighbor #290 sold in 2000 for $1150k
Short sale now at $750k !!!
02-06-2013 07:32 PM
plenty of cheap rentals in Stockton. Just hard to collect any rent
Yeah I was going to mention that.
People buying investment property now only seem to remember the last 12 mos. There have been periods where you could not find renters for anything outside of SF or San Jose. Even many east bay cities were impossible to rent. Personally I think Stockton and Sacto could be a fools game right now. Lots of foreclosures still and cheap properties to buy but who are you going to rent to? You are better off in the bay area somewhere if you can swing it.