Roseville, Rocklin, Lincoln, Loomis, Granite Bay - Placer County, California - Real Estate Blog - Souza Realty

It's A Good Time To Buy Real Estate Investments When...

...You have a high-value rental property with a low-value rental income. You can do a 1031 Exchange and buy properties that give you a higher rate of return. What's better: a $750,000 home renting for $3,000/month or 3 $250,000 homes, each renting out for $1,800/month?

...You determine that steady rental income is better than the dividends you've been getting from your 201k (formerly known as 401k). Sure, maybe there are a handful of people out there with flourishing stock portfolios, but there are many, many more who have seen their values drop significantly in the recent years.

...You have a lot more than an 8-month emergency fund sitting in your savings account earning you less than 1% interest. Everyone should have at least 8 months worth of monthly expenses, to be used in case of emergency. However, any "extra money" should be used to make the most of your financial future...which needs to earn you a lot more than 1% interest!

...You and your partner/spouse are on the same page when it comes to investing in real estate. Some couples can't seem to agree on whether or not they should invest in real estate because they may have very different risk levels. It should be something you decide on together, not a reason to place future blame on the person for either investing or not investing.

...You are familiar with the things that can go wrong with owning rental property and being a landlord. Remember that movie Pacific Heights with Michael Keaton that took place in San Francisco? Sure, it's a movie...but you get my drift. Being familiar with all of the rental laws and ordinances will help keep you out of trouble. :)

...You have a team of professionals guiding you to make the best decisions when it comes to real estate investments. This not only means having a real estate brokerage that specializes in investment property (like Souza Realty for properties in Roseville, Rocklin, Lincoln, Loomis and Granite Bay, CA - zip codes 95648 95661 95747 95677 95765 95648 95650 95746), but having a property manager, real estate attorney, CPA, insurance agent and a team of contractors and repairmen is also beneficial.

Prices Have Increased 45% Over The Last 6 Months. What Are You Waiting For?

"The home you look at today and offer on tomorrow is the same home someone else looked at yesterday and is offering on today."

-Author Unknown

One thing that Bob and I have in common is that we're not followers. What other people are doing has no bearing on the decisions we make, especially when it comes to buying real estate. It's always better to be a leader because by the time all the followers arrive, the "Supply & Demand See-Saw" will tip in the other direction, which drives the prices up.

(Photo courtesy Joe Shlabotnik ~ flickr)

Here's my example:

7 months ago, we bought a condo for $44,000. Last month, the same condo two doors down from that one sold for $64,000.

• The condo we bought had been sitting on the market for a little while. It fell out of escrow twice before we made an offer. Since the condo is located in an area we're familiar with, it didn't matter to us why this property seemed to have a tough time selling or why no one else was interested. The numbers worked, so we bought it.
   
• Although I can't explain why, the condos in this complex have been selling like hotcakes since then...and of course, prices have shot up significantly due to supply and demand. Appraisals aren't an issue, as all buyers have been cash. Even at $64,000 it's still a good investment property...but it was just much better at $44,000.

Should I Invest In Real Estate In A Declining Market?

At first glance, I think that most people would answer this question with a big fat NO! The words "invest" and "declining" just don't look all that attractive when paired together in the same sentence. However, as a real estate investment specialist, here are my thoughts when it comes to investing in a declining real estate market:

• Choose the best option available to you on what to do with your money. Everyone's situation is different, but most people would like to see the highest rate of return with the least amount of risk. Here are a few common options:

1. Savings Accounts - Most are currently offering less than a 1% interest rate. Some people think this is the safest place to keep money, but it seems risky to me...earning 1% interest on your money doesn't even keep up with inflation!
    
2. Stock Market - There is always a risk that stocks you invest in could one day crash, and financial gurus like Suze Orman says she thinks the market will continue to decline further in 2012.
    
3. Rental Property - Even if the property value declines, you will still continue to have cash flow. The rental market is stronger than ever, with the amount of short sales & foreclosures taking people out of homeownership.

But I'm An ALL CASH Buyer...Doesn't That Make Me King?

Cash is king...isn't it? Yes, it is...generally speaking. However, it doesn't necessarily apply to all real estate transactions and it is a common misconception among some all cash buyers who may be thinking of entering the real estate market. Investors who are actively buying real estate in Roseville, Rocklin, Lincoln, Loomis and Roseville, CA already know that simply being an all cash buyer doesn't necessarily mean you'll have access to securing any investment property you want at a bargain price. The truth is, there are many cash buyers out there and there is a lot of competition for properties that provide a good rate of return on your investment.

(Photo courtesy fiveinchpixie ~ flickr)

CASH IS KING IF...

...You want to buy property at trustee's sales. In California, you need to have cash in order to bid on properties being sold at the trustee sale auctions (unless prior arrangements are made).

...You are buying a condo in a complex that doesn't qualify for financing, but only if you're the only buyer making an offer. Remember, any other competing buyer will most likely have cash, as well.

...You are a buyer in a multiple offer situation and are offering the same price/terms as other buyers who are not all cash. When dealing with bank owned properties however, the outcome can sometimes be unpredictable.