Hello,
I'm very new to investing in real estate. I purchased a condo last year in Palo Alto CA. I'm looking to invest in another property, but will probably look outside the bay area since it is most expensive. I'm thinking of Phoenix AZ or Austin TX. Are these good cities to invest? Also, what are some of the best cities to invest in for the future? Any ideas? Thanks

I am in Florida and would highly highly advise you to look into anything anywhere in FL. California investors are buying stuff here sight unseen. Jacksonville has areas that have appreciated 40 a year over last 3 years. Orlando similar and Ocala has double over 2 years. It is the next california. It is do to corporate relo in Jacksonville due to corp tax structure in Florida, low wages, and no state income tax. I am selling Oceanfront Condo highrises for 450 a square foot. I can still get people into a 3500 square foot house within Jacksonville limits for under 200K. Good luck. Anywhere is a great investment, just some places are better than others.

Straight from the horses mouth........

Go East, young man

The West is way more sophisticated than the East (he call's easterners neanderthals) in regards to real estate. Northeastern and Midwestern real-estate is generally abysmal compared to western standards. Reed did a CCIM to population study of CCIM's. The west had the most as the northeast had the lowest. Examples- lack of exchanging in the east, and lack of income-property ads in the classified sections of the papers. There would always be local market knowledge to aquire and westerners would be handicapped by the lack of the support network of vendors they are used too.
Again, Westerners would be amazed at the lack of sophistication in the east and would profit with such backward investors and sellers.


To me this all goes back to "modern investing" and online judicial systems. I think investing in land (delinquent subdivision mortgages, etc.) would do dang well in hot markets like Phoenix, Vegas, Texas. But if your persuing gerneral strategies like probate, foreclosure, Oreo's, Repos, Distressed owners...etc. You will want to be able to search court records and all the necessary data in real time. Reed stated that only ORE/WA/PA were online in the mid-90's but folks on this forum- who know what their talking about say their counties are online also, so states are moving in that direction. To state the seriousness of "modern investing" using the internet- you could get +Neural network programming that automatically filters through bargains and detects opportunities for you.

So to answer your question I would definitely use the internet, or find a unique strategy or strategies and persue them in certain areas where they are hot -like "land" (certain types) in the southwest-high growth areas..etc. Appreciation is a fool's way of investing, rather than the professional's approach -bargain hunting.

Please take into account I am only beleiving Reed's 30 years of research on the topic and am not actually actively investing in any market. But im 100% confident in following the right advice(Reed's) -as with using online judicial system's, and types of strategies that actually contain bargains.

>>p.s. Please take advice in this forum with a grain of salt. This forum was created generally for salesman, hardly people you want to obtain hard investment facts/advice from.. wish the best of luck.

Thanks for the info NEFlorida. At one point, I was looking in Florida. I had heard that it has already appreciated. Also, the hurricane insurance scared me a bit. Even though it has appreciated, I'm still thinking it may be a good place to invest (I agree that it will be the next CA). Do you know on average how much hurricane insurance costs? Also, what areas in Florida would you most recommend (in terms of up and coming but still affordable?). I'm looking for a place that is easy to rent. Thanks again for all your information.

I am a realtor in Austin. Residential properties are still overpriced a little overpriced in some hot areas, but the prices are still lower from the Tech Bust in 2002. Like many other areas in Texas, foreclosures are high.

Commercial office space is actually just getting out of it's downtrend, so now is an excellent time to buy commercial. I've purchased 3 residential rental properties during the past year and a half, but purchased south and east, which is where Austin is most affordable and growing.

A lot of investors from California have are buying second homes or investment properties in Austin without regard to cashflow, which has helped us in a way but also driven prices artificially high when they should be lower. Most rehab investors are moving south to San Antonio or Bastrop, which is shaping up to be a retirement community for Baby Boomers. There are some bargains out there, but they are tough to come by.

I am a firm believer in contrarian investing when looking to buy properties.

For example the little condo that I live in now was purchased 2 years ago in an absolutely awful real estate market.

The owner had this place listed listed for at least 2 years trying to sell it. I was one of the listing agents.

I did get a buyer who bought the place with seller financing. This buyer immediately defaulted.

After getting the property back, the owner rented it out, using me to manage it.

After managing the place for six months, I asked the owner if I could buy it with seller financing. I offered him $45,000 (It was listed previously for $50,000) He agreed to the seller financing if I would put $5,000 down. I said all I could put down was $500, but I would paint, re-carpet, and catch up the homeowners dues that were $1700 in arrears. He agreed if I would pay him in full in no more than 5 years.

After the closing, I did my fix-up, paid the homeowners dues and then rented the place out for a year before moving in.

I refinanced a couple of months ago to get rid of the ballon payment (which had 3 years left to go). This little condo appraised for $62,000 at that time. Not bad for 26 months ownership.

The only reason I did so well, was I was willing to buy in a down market when everyone else was desperate to sell. I have several other examples, but this is the most recent.

So, perhaps you should look for a market that is down and buy there, instead of looking for a hot market.

Don Glasgow
Real Estate Investing

I'd go with Don's advice. If you follow the crowd, you'll likely get burned. Remember the Stock Market boom and crash a few years back. There are many areas where prices have been depressed. Personally, I'd start shopping there. Remember for income property, there is always a need for places to rent, even in depressed areas. If you acquire property "cheap" there, when the market rebounds in time, you'll see some nice gains! Good luck.

I Live In Orlando Florida. I Invest In Jacksonsville. There are some Great deals to be had in Jax. I have a complete Network of Wholesalers, Hard Money. Contractors , Property Management etc in Jax

Jack

Don is right about buying in a "hot area". If you get in before the boom hits or possibly in the middle of a boom, you may do ok, but the biggest profits are when an area is on the cusp of a boom.

You should look for a city or suburb that seems that shows strong signs of growth and a healthy economy, then learn as much as possible about the area before purchasing. You should at least know someone in the area who can give you advice on the outlook or help you identify potential issues.

So I'm back after thinking and looking around. I have two great picks for investing.

1- Flint, Michigan
2- Buffalo, New York

Both cities are in the midst of long term economic woes. Although the weather is not the best in either place, I'd look around these cities if you want some super deals....

well appraised value and MARKET value are VERY diferent.

but pull all the money out but keep it at 80%LTV and go after another home.

i think the buy down and sell up is fine....... if you have a LARGE amount of money backing you and you have time to burn.

the most common senario im in is this.
find an investor a reo or private owned listed (or our own) that he or she can flip at about 20-30% profit.

buy the home, say 50k, 15k in rehab, 5k closing.

so were at 70k now with a house that will appraise at 100.

suck out 10k for the next home, yet still keeping the note at 80%LTV (incase they need to sell)

note, insurance, taxes, your lookin at around 700. Rent it out at 950 and move onto the next one.

10k for the next home, 250(even though a good deal you want 300-350) a month profit in pocket, and someone paying your mortgage.

doing this with a duplex for almost the same amount, iv seen people pocket 1000k a month

obviously there are many variables but basicly the most common goal.

Good basic example of leverage, but make sure you know that the finance leverage "sword" swings both ways. I consider my self a risk taker and would use leverage as much as I can.

On CNBC last week a some analyst with aspen real estate holdings out of colorado talked about a RE "bubble". They really didn't get to a conclusion of a pending bubble, since a poll reported that buyer's anticipate double-digit returns for the next decade. Although he did say all along the Coasts (ex. Cali,Ny etc) were high priced because of location and supply. He had good marks for Texas however, because of their zoning requirments being so relaxed... houses being constructed next to a building- lots of rampant building with all that room.

Hello

If you need information on investing in Northern Virginia please feel free to contact me my email is
info@ritudesai.com

Good Luck!
Ritu

I have read many reports and letters from our RVAR about the boom prediction in Eastern Virginia, near Norfolk and surrounding counties.

I would also have to agree that Northern Virginia is a great market to invest in. Many "experts" have predicted that this market will pass California to be 2nd in values behind NY/NJ. We have had around 20% appreciation over the last 4 years with a long way to go to catch up to California. We have the benefit of the government being located in the Metro Dc area. We dont really feel any recessions here. As many client as I have moving out of the area, I have doubled moving in.

Michael C. Glass
REMAX Select Properties
(703) 723-2379
info@moveupwithmike.com
www.moveupwithmike.com

Thanks Mike! Good to know. Is the market there in a building frenzy?

Take a Look at myrtle beach, SC. Our market is heating up

Clarksville, TN is on the Tennessee side of Ft. Campbell, KY army base as it is centered on both states. Our area has grown and grown and grown, well out of its capacity for schools and economy. It has a secure future for the military because it is the home of the 101st Airborne Division and is home to several factorys that will not move in the near future. It is said that home values will increase 12% in the next couple of years over what it is steadily rising at the current time. Our area offers many Foreclosures that are low priced need little rehab and have great resale and/or investment opportunity as a Rental property.

Andrea Reeder
Century 21 Alamo Realty, Inc.
Clarksville, TN
931-245-1201
areeder@c21alamo.com