Posted by G (CO) on August 01, 2002 at 11:39:50:
I think you posted on the wrong line, or you meant to say ‘he’ instead of ‘you’, because I did not advocate anything
Newbie can’t find Good Deal in Southern CA - Posted by Muni
Posted by Muni on August 01, 2002 at 05:53:37:
Hello Friends;
I have been hooked on to CREONline since March 2002. I have a lot to learn. I have been trying to find a motivated seller, but in Southern CA it is very difficult. Here, the house listed in the market get sold within 2-10 days with highgest price. When it is seller’s market, how could you find a motivated seller? I am sure there are deals out there in CA but I need some advice on how to find them. For example: One seller has a fixer-upper house in Orange county, CA but he wants a) a pre-approval letter from lenders b) $2000 deposit in Escrow account c) a signed contract. He needs these 3 things BEFORE even let you get into the house to just VIEW the property. The reality is people are lined up to see the house with these requirements. Any suggestions would help. Is anyone out there from Southern CA making deals/flipping properties with NO MONEY DOWN??? Thanks.
Muni, Southern CA
Re: Newbie can’t find Good Deal in Southern CA - Posted by G (CO)
Posted by G (CO) on August 01, 2002 at 09:39:26:
Muni,
What are you doing to market yourself? What are you doing to get sellers to call you? I spent 25 years in San Diego and I know what the market is like. I’m in a small town in Colorado now and have learned what the market is like here. In comparing the two, I would have to say that with the millions of people there are in So Cal, surely there has to be somebody relocating to Denver Co, or going through a divorce, or spending all there money ON CRACK and can’t make there house payment. I hope you see my point. MARKETING!!!
~G (CO)
Re: Newbie can’t find Good Deal in Southern CA - Posted by Sean
Posted by Sean on August 01, 2002 at 08:04:00:
Muni,
Hello from Alhambra, California. I own a couple of condominiums in Van Nuys that I bought in 1997 and 1998. I put both of them on the market at the price dictated by the comps and received offers on them for $8,000 and $10,000 more than the asking price. In short, real estate has been good to me.
And the reason that real estate has been good to me is because I bought at the right time and sold at the right time. Now, I bought at the right time because I was lucky. I didn’t know much about real estate when I bought my first condo, other than what Carleton Sheets had taught me in his course. I thought – I really thought that property went up 5% in value every year. In reality property values can go up 30% in a year and decline in value 20% a year or two later.
I would recommend to you that you don’t give up on real estate, but that you also don’t buy anything right now. The surest way to make a killing in real estate is to buy when interest rates are high and coming down and to sell when interest rates are low and may go up soon.
If there’s a motivated seller anywhere in Los Angeles or Orange County, I’d be very much surprised. Even before I listed my property I had people asking me to sell it to them and offering me top dollar.
It won’t last. In a few years interest rates will be higher, property values will be lower and there will be plenty of people out there with no equity and low interest rate loans that will be glad to have you take over their property ‘subject to’ the existing financing.
Re: Newbie can’t find Good Deal in Southern CA - Posted by Adam Katz (Austin, TX)
Posted by Adam Katz (Austin, TX) on August 01, 2002 at 10:18:54:
You state: " The surest way to make a killing in real estate is to buy when interest rates are high and coming down and to sell when interest rates are low and may go up soon. "
I don’t understand your reasoning. Why not buy when interest rates are low AND when supply is great, and sell when supply is LOW and demand is HIGH. Regardless of what the interest rates are? (Obviously, better when they’re lower.)
Buy When Interest Rates High - Posted by Sean
Posted by Sean on August 01, 2002 at 19:08:41:
When someone goes to buy a piece of real estate to live in they are normally concerned with only one thing: How much will this piece of property cost them, per month, to live in?
Let’s assume they’ve decided (or their banker has decided) that $800/month is what they are capable of paying. Interest rates are currently 14 percent. The person plans to put 10 percent down. How much can they pay? Answer: $75,000 with $7,500 down he’ll finance $67,500 at 14% payments of $799.79 a month.
What if the situation is the same but interest rates are 6% instead? How much will he be willing to pay then? Answer: $148,000 with $14,800 down financing $133,200 at 6% the monthly payments will be $798.60.
Accordingly if you buy a property that a buyer is willing to pay $800/month to own while interest rates are at 14% and turn around and sell it when interest rates are at 6% (and people still want to pay $800 for the place, no more, no less) you have made a profit of $73,000.00.
But even better yet, if you can buy the house when interest rates are 14% and people are only willing to pay $75,000 and take over the guy’s low interest loan then you’re doing even better.
Re: Newbie can’t find Good Deal in Southern CA - Posted by G (CO)
Posted by G (CO) on August 01, 2002 at 10:56:49:
Adam,
You’re right to a point. They way I look at it, is anytime is a good time to invest in real estate. You just have to know what type of investing will work during that time period and always do your due diligence. Real estate investing is not limited to just buying and selling, there are lots of other ways to make money, yes, during any market period.
G (CO)
Re: Newbie can’t find Good Deal in Southern CA - Posted by Adam Katz
Posted by Adam Katz on August 01, 2002 at 11:05:04:
I was just curious why you advocated buying when rates are high?
Thanks,
Adam.