Orchard Hills - Capella by Taylor Morrison

[Laguna21]

@USC: rates at the time were 3.5% - over 250K in equity was gained within 4 years of purchase date.

Not saying real estate is the best investment of all. Just saying that I've had family, friends & others make a living from rentals. It's not for everyone. It requires dedication, and a little luck and timing.

The stock market is probably a better choice overall, but some people enjoy real estate more than stock investments. Timing is everything.

SF prices will continue to explode, and so will rents due to building limitations & messed up policy with rent control which actually backfired & caused rents to skyrocket. SF has and always will be one of the higher priced markets, and commands the highest rents in the country.

 

[usctrojancpa]

@USC: rates at the time were 3.5% - over 250K in equity was gained within 4 years of purchase date.

Not saying real estate is the best investment of all. Just saying that I've had family, friends & others make a living from rentals. It's not for everyone. It requires dedication.

The stock market is probably a better choice overall, but some people enjoy real estate more than stock investments. Timing is everything.

SF prices will continue to explode, and so will rents due to building limitations & messed up policy with rent control which actually backfired & caused rents to skyrocket. SF has and always will be one of the higher priced markets, and commands the highest rents in the country.

I don't disagree that SF will be a higher priced market, just like Manhattan for the reasons you've mentioned.  But as you also said, timing is everything like how I bought my West Irvine home for $575k at the end of 2011 and sold it last year for $875k to one of my clients.  I just can't get past how low the cap rates are for SF properties, the same thing is going on in Santa Monica for very similar reasons with today's rates for rentals being in 4ish range.  I own a few rental properties and the home that my dad lives in (Vegas) because I also believe that in the long term real estate will continue to increase in price, especially in the Irvine/Tustin Ranch area.  I also like keeping a diversified portfolio of real estate, cash, limited production GT cars, and trading money to balance things.

 

[Laguna21]

@USC: I totally agree, diversifying your portfolio is so important. Not putting all your eggs into one basket. I am the same way, and have other investments. But love real estate, and come from a family of real estate inventors, so I enjoy the business.

I had thought about investing in Vegas too, but things seemed so iffy out there a few years back, a lot of condo complexes looked like they had a ton of vacant places, but are things looking better in Vegas now?

 

[jmoney74]

I don't meet a ton of people that made big life changing financial success from stocks.  I'm sure they are out there.. but not in my circle.  All of the ones that do have great success.. they own multiple properties.

 

[Laguna21]

@jmoney: those are the people I know too. I only knew of one person who purchased AOL stock early on & made millions.

Other than that, all the people I know who were able to retire comfortably are ones that invested in rental property over the years.

 

[jmoney74]

@jmoney: those are the people I know too. I only knew of one person who purchased AOL stock early on & made millions.

Other than that, all the people I know who were able to retire comfortably are ones that invested in rental property over the years.

But yeah let me know when you find the next stock we can retire on. Lol

 

[Paris167]

I don't know why everyone is harping on equity of these homes in 2 years. The only time you need to worry about that is when you're selling your primary residence.
I'm pretty sure most of Capella bought these homes as primary residences since most are owner occupied and very few are sitting empty as secondary homes.
And the last two resales were unforseen circumstances where the families had to sell fast and get out. I'm pretty sure when they initially bought them they weren't planning to "flip" the house.
The only losers per say would be the flippers of these homes. Otherwise as USC mentioned the overall trend of most homes in Irvine - especially those within gated OH, elevated next to the hills, surrounded by unique topography and soon to be neighbors with the vistas which I'm sure will resale within the 4 million price range - would be a trend UP in price.
Why don't we revisit this topic in about 7-10 years. Until then why is everyone so concerned about short term equity unless they are simply in it to flip?

 

[usctrojancpa]

@USC: I totally agree, diversifying your portfolio is so important. Not putting all your eggs into one basket. I am the same way, and have other investments. But love real estate, and come from a family of real estate inventors, so I enjoy the business.

I had thought about investing in Vegas too, but things seemed so iffy out there a few years back, a lot of condo complexes looked like they had a ton of vacant places, but are things looking better in Vegas now?

Yeah, Vegas can definitely be very iffy.  If you buy over there, you want to buy in the best areas like Summerlin (I call it the Irvine of Vegas) and Anthem.  You could have doubled your money on some condos if you would have bought in 2010 and 2011 as prices were below replacement cost and close to 10% cap rates.  I'm not going to complain at all and have been very fortunate over the past 7+ years for many reasons.

 

[aquabliss]

For some reason I like Henderson better than Summerlin, but maybe that's where Anthem is near Henderson? (Sounds familiar)

Anytime I go North of Spring Mountain it just feels creepy and ghetto.  Probably didn't see the nicer part of Summerlin though.

 

[usctrojancpa]

For some reason I like Henderson better than Summerlin, but maybe that's where Anthem is near Henderson? (Sounds familiar)

Anytime I go North of Spring Mountain it just feels creepy and ghetto.  Probably didn't see the nicer part of Summerlin though.

Yeah, Anthem is in Henderson.  Summerlin is one of the largest master plan communities out there.  The heart of Summerlin is the Red Rock Casino and the new mall just south of the casino off the 215 between Charleston and Sahara near the Red Rock mountains.
http://summerlin.com

 

[irvinehomeowner]

Summerlin (I call it the Irvine of Vegas)

Did Panda hijack your account?

Just like Asians have to have As, an "Irvine" has to have Asians. What is the demographics of Summerlin?

 

[Laguna21]

For some reason I like Henderson better than Summerlin, but maybe that's where Anthem is near Henderson? (Sounds familiar)

Anytime I go North of Spring Mountain it just feels creepy and ghetto.  Probably didn't see the nicer part of Summerlin though.

Yeah, Anthem is in Henderson.  Summerlin is one of the largest master plan communities out there.  The heart of Summerlin is the Red Rock Casino and the new mall just south of the casino off the 215 between Charleston and Sahara near the Red Rock mountains.
http://summerlin.com

@USC - we looked at Summerlin years ago! Over 5 years ago, we had considered actually moving there to save money, & not have to pay the outrageous FTB taxes, but I just can't get over living in Las Vegas, NV. Defo not for us. But I heard really great things about that area. Great for families, we drove through and the homes were really nice.

I also know of Henderson, and prefer Summerlin over that area. Henderson seems too far out in the boonies, whereas Summerlin just seems like a better location overall. Both are very nice areas though, and very family oriented.

@Paris: I agree with you wholeheartedly. Most locations can't expect to turn a profit within 2 years, it's a highly unreasonable expectation, unless it's anomalies like La Vita, or even Laguna Altura. Most of the time, that doesn't happen, and if it does, even within a 5 year time-span, consider yourself lucky.

I'm sure most of those re-sellers had other plans that came up, and weren't planning on selling out so quickly.

Either way, in years to come, when OH is built out, there will be plenty of equity for all buyers. & those who are waiting in the wings will be priced out.

 

[hello]

@hello:

Are you aware of how much places rent for in SF? An 800 square foot, 1 bedroom condo can rent for up to $4,000 a month.

Although a few places in SF can rent for that much, almost all of them will not.  The biggest problem here is not that your rent price is inflated for almost all of SF, but rather that you are looking at this only from one angle.  Sure you can find a 800 sq ft place that rent for 4k, but what does this 800sq ft place cost to buy???  Why would you only consider what a place rents for without consider what it costs to own???

If you have enough money to put down, and already have other properties with equity, and are holding in the long-term, it could be a great investment for the long-term.

it doesnt matter whether you have the money to put down and whether you have equity in other properties... a bad investment is a bad investment.  These things are a non-factor unless you can cash flow with a long term buy and hold.  You should know that cash flow is rule #1 when considering long term buy and holds. 

Without getting into my portfolio, I have had great luck with real estate investments and rentals so far, & have gained a significant amount of equity in the last 5 years as well. But in it for the long-haul.

Great on you, but EVERYONE who bought 5 years ago is making money.  You are a classic case of getting it right for the wrong reasons.  People like you are dangerous to others because you give advice based on dumb luck and expect people to have same outcomes as you for the wrong reasons.

What do you suggest then if someone isn't to invest in a Place in SF then? Since you seem to have it all figured out.

I never said I had it all figured out, nor did I say I had suggestions.  I just simply felt to need to call out a BS'er when I see it.  You said yourself that you "cannot go wrong investing long term in a place like SF".  Im sorry that is BS and if you dont realize it, then you really shouldnt be giving out advice.  Im not trying to be mean, but you could be costing someone a large sum of money with bad advice like you gave.

The only suggestion I would have for someone interested in long term buy and hold is make sure you cash flow and dont underestimate costs to own. 

 

[Laguna21]

@hello:

Are you aware of how much places rent for in SF? An 800 square foot, 1 bedroom condo can rent for up to $4,000 a month.

Although a few places in SF can rent for that much, almost all of them will not.  The biggest problem here is not that your rent price is inflated for almost all of SF, but rather that you are looking at this only from one angle.  Sure you can find a 800 sq ft place that rent for 4k, but what does this 800sq ft place cost to buy???  Why would you only consider what a place rents for without consider what it costs to own???

If you have enough money to put down, and already have other properties with equity, and are holding in the long-term, it could be a great investment for the long-term.

it doesnt matter whether you have the money to put down and whether you have equity in other properties... a bad investment is a bad investment.  These things are a non-factor unless you can cash flow with a long term buy and hold.  You should know that cash flow is rule #1 when considering long term buy and holds. 

Without getting into my portfolio, I have had great luck with real estate investments and rentals so far, & have gained a significant amount of equity in the last 5 years as well. But in it for the long-haul.

Great on you, but EVERYONE who bought 5 years ago is making money.  You are a classic case of getting it right for the wrong reasons.  People like you are dangerous to others because you give advice based on dumb luck and expect people to have same outcomes as you for the wrong reasons.

What do you suggest then if someone isn't to invest in a Place in SF then? Since you seem to have it all figured out.

I never said I had it all figured out, nor did I say I had suggestions.  I just simply felt to need to call out a BS'er when I see it.  You said yourself that you "cannot go wrong investing long term in a place like SF".  Im sorry that is BS and if you dont realize it, then you really shouldnt be giving out advice.  Im not trying to be mean, but you could be costing someone a large sum of money with bad advice like you gave.

The only suggestion I would have for someone interested in long term buy and hold is make sure you cash flow and dont underestimate costs to own.

@hello: When you purchase a home/condo or anything it will ALWAYS be cash flow negative out of the gate.
In most scenarios when investing, you will NEVER find a situation, unless you are a contractor and can fix up a place for dirt cheap, & turn around and flip it - that will be cash flow positive.

My investment in SF was NOT dumb luck. That is the most uninformed statement I have ever heard. The real estate market in SF has always been the rise, and rents are sky high in SF, always have been, especially in recent years. It is also NOT out of the realm for an 800 square ft 1 bedroom place in SF to rent for $4,000 a month. Anyone who has read anything about rents in the city knows very well how sky high they are. It's common knowledge. There are also NUMEROUS other factors that I won't get into that would take up an entire thread on why SF rents, prices will always remain on the rise.

The entire point of investing in real estate is that you will gain equity out of it in the future, so you can turn around and re-invest via 1031 exchanges into larger properties. Of course, there are no guarantees, but I've seen a LOT of success with family, friends, and their friends with real estate. A lot of people were able to support themselves, and be financially free in doing so.

I also speak from experience, generations of my family invested in real estate, came from nothing, and saved up a lot of coin - they were not house flippers, contractors. They literally invested in homes, apartments, and duplexes/triplexes and rented them out for a LIVING.

At any rate, on another note: I think you are an extremely toxic, caustic, and negative person, and contribute ZERO value to this forum. I don't know what situation you came from, but I can surmise that you probably had poor luck with your own investments, and are bitter about it.

If you are SO well versed in the world of real estate, investments etc. Why don't you provide some insight instead of bashing everyone's post, saying prices of homes in Irvine are too high and so forth. Quit the negativity, it's getting REALLY old.

All one has to do is look at your posts historically. It's entertaining to say the least.

 

[hello]

@hello: When you purchase a home/condo or anything it will ALWAYS be cash flow negative out of the gate.
In most scenarios when investing, you will NEVER find a situation, unless you are a contractor and can fix up a place for dirt cheap, & turn around and flip it - that will be cash flow positive.

Again false.  Many investment homes can be purchased with positive cash flow from day 1.  In fact im working on one right now in the inland empire that has a cash on cash of 13.5% with 25% down with 20% factored in for both Cap Ex and maintenance costs. 

Your advice about SF properties however will be cash flow negative from day 1 till you pay off the mortgage.

My investment in SF was NOT dumb luck. That is the most uninformed statement I have ever heard. The real estate market in SF has always been the rise, and rents are sky high in SF, always have been, especially in recent years. It is also NOT out of the realm for an 800 square ft 1 bedroom place in SF to rent for $4,000 a month. Anyone who has read anything about rents in the city knows very well how sky high they are. It's common knowledge. There are also NUMEROUS other factors that I won't get into that would take up an entire thread on why SF rents, prices will always remain on the rise.

Like I said, ANYONE who bought in SF 5 years ago is making money right now.  That fact that you own SF investments doesnt make what you say about buying in SF right now correct.  If you still think that you CANT go wrong in SF, are you putting your money where your mouth is???  And like I said although you can find a few 800sq ft renting for 4k, its is definitely not the norm.  Please check zillow rentals if you like. 

The entire point of investing in real estate is that you will gain equity out of it in the future, so you can turn around and re-invest via 1031 exchanges into larger properties. Of course, there are no guarantees, but I've seen a LOT of success with family, friends, and their friends with real estate. A lot of people were able to support themselves, and be financially free in doing so.

As I suspected, your investment strategy is purely based on appreciation, yet you recommend long term buy and hold with negative cash flow.  Does that make any sense??? 

1031s are great because of gained equity through price appreciation, but again your logic is one dimensional.  What will it cost you to gain the price appreciation?  How much and how many years of negative cash flow is worth the price appreciation?  Have you ever heard of opportunity costs?

At any rate, on another note: I think you are an extremely toxic, caustic, and negative person, and contribute ZERO value to this forum. I don't know what situation you came from, but I can surmise that you probably had poor luck with your own investments, and are bitter about it.

Just because I disagree with you, it doesnt mean im toxic and negative.  You are probably just unhappy about the fact that I refuted your absurd claim that one cannot go wrong with buying rentals in SF right now.  At the risk of sounding toxic to people like yourself, I would argue that my posts add a value in that it may force some people to actually think about and analyze the ridiculous claims people like you make about real estate investing. 

If you are SO well versed in the world of real estate, investments etc. Why don't you provide some insight instead of bashing everyone's post, saying prices of homes in Irvine are too high and so forth. Quit the negativity, it's getting REALLY old.

I never claimed I was an expert, however I know enough to know that your advice was bad.  It was just too difficult for me to not respond to such ridiculous claims.  Im actually surprised that others didnt bother to respond, although USCTrojan did chime in a bit.  You may think its just bashing, but that probably because its your post that I am refuting.  If you want to get you panties in a bunch because I disagree with you, perhaps you should look for the TI safe zone.  These forums are useful for exchanging ideas and opinions.  Just because my opinions dont jive with yours, it doesnt mean someone is negative, toxic, or bitter because you "surmised I had poor luck with investing".  Dont be hypocritical. 

BTW Im doing just fine... thank you.  

 

[Ready2Downsize]

@hello:

Are you aware of how much places rent for in SF? An 800 square foot, 1 bedroom condo can rent for up to $4,000 a month.

Although a few places in SF can rent for that much, almost all of them will not.  The biggest problem here is not that your rent price is inflated for almost all of SF, but rather that you are looking at this only from one angle.  Sure you can find a 800 sq ft place that rent for 4k, but what does this 800sq ft place cost to buy???  Why would you only consider what a place rents for without consider what it costs to own???

If you have enough money to put down, and already have other properties with equity, and are holding in the long-term, it could be a great investment for the long-term.

it doesnt matter whether you have the money to put down and whether you have equity in other properties... a bad investment is a bad investment.  These things are a non-factor unless you can cash flow with a long term buy and hold.  You should know that cash flow is rule #1 when considering long term buy and holds. 

Without getting into my portfolio, I have had great luck with real estate investments and rentals so far, & have gained a significant amount of equity in the last 5 years as well. But in it for the long-haul.

Great on you, but EVERYONE who bought 5 years ago is making money.  You are a classic case of getting it right for the wrong reasons.  People like you are dangerous to others because you give advice based on dumb luck and expect people to have same outcomes as you for the wrong reasons.

What do you suggest then if someone isn't to invest in a Place in SF then? Since you seem to have it all figured out.

I never said I had it all figured out, nor did I say I had suggestions.  I just simply felt to need to call out a BS'er when I see it.  You said yourself that you "cannot go wrong investing long term in a place like SF".  Im sorry that is BS and if you dont realize it, then you really shouldnt be giving out advice.  Im not trying to be mean, but you could be costing someone a large sum of money with bad advice like you gave.

The only suggestion I would have for someone interested in long term buy and hold is make sure you cash flow and dont underestimate costs to own.

@hello: When you purchase a home/condo or anything it will ALWAYS be cash flow negative out of the gate.
In most scenarios when investing, you will NEVER find a situation, unless you are a contractor and can fix up a place for dirt cheap, & turn around and flip it - that will be cash flow positive.

My investment in SF was NOT dumb luck. That is the most uninformed statement I have ever heard. The real estate market in SF has always been the rise, and rents are sky high in SF, always have been, especially in recent years. It is also NOT out of the realm for an 800 square ft 1 bedroom place in SF to rent for $4,000 a month. Anyone who has read anything about rents in the city knows very well how sky high they are. It's common knowledge. There are also NUMEROUS other factors that I won't get into that would take up an entire thread on why SF rents, prices will always remain on the rise.

The entire point of investing in real estate is that you will gain equity out of it in the future, so you can turn around and re-invest via 1031 exchanges into larger properties. Of course, there are no guarantees, but I've seen a LOT of success with family, friends, and their friends with real estate. A lot of people were able to support themselves, and be financially free in doing so.

I also speak from experience, generations of my family invested in real estate, came from nothing, and saved up a lot of coin - they were not house flippers, contractors. They literally invested in homes, apartments, and duplexes/triplexes and rented them out for a LIVING.

At any rate, on another note: I think you are an extremely toxic, caustic, and negative person, and contribute ZERO value to this forum. I don't know what situation you came from, but I can surmise that you probably had poor luck with your own investments, and are bitter about it.

If you are SO well versed in the world of real estate, investments etc. Why don't you provide some insight instead of bashing everyone's post, saying prices of homes in Irvine are too high and so forth. Quit the negativity, it's getting REALLY old.

All one has to do is look at your posts historically. It's entertaining to say the least.

I'm not sure if anyone has mentioned it but rental income does not decrease social security payments and therefore can be a good source of income for retirees.

 

[Laguna21]

@hello:  my panties are definitely not in a bunch. I just think you are a very one dimensional thinker. You make decisions based on your calculator alone without consideration of other elements in investing.

Re: the Inland empire investment - that may be true, but greater appreciation will be had with a property in SF over one in Inland Empire. You are playing it safe, & that's the reason why you will never have a strong portfolio because you calculate everything down to the last dime. There's more to investing than just positive cash flow from day 1. That's where real experience in real estate investment comes in.

I don't need to put my money where my mouth is, because i have experience, equity, and quite a diverse portfolio to back up my claims. Something you clearly don't have because of your previous statements which allude to complete one dimensional thoughts without any experience to back it up.

You've also made several comments about Irvine homes being overpriced, so it sounds like you are waiting in the wings for the prices to be reduced to buy. Sorry, you missed your window.

Good luck with your investments, and cash-flow positive life

 

[irvinebullhousing]

Everyone risk tolerance varies  No risks no rewards. Investing in properties in Irvine or Irvine like area while seem risky right now but that's exactly what is in the recipe for success. There are many factors involving in the acquisitions process and gutsy is one of them. Looking back on the 20 plus years time frame for real estate purchased in a highly desirable neighborhood / area, the investment have at least double, mine triple. Laguna21, is pretty darn successful.

It take guts to make money. One can play safe and it goes really nowhere. Being in jail is pretty safe too.


Just my ..02 cents.

 

[AW]

I'm with hello in terms of real estate investing, looking at numbers, market cap rates, cash flow, etc.

Used to think that it's nuts to invest in high demand areas because of the numbers not making sense, would like to be at this level, where I have a larger portfolio and want to diversify, and I can put tons of equity down on high demand areas which it'd cash flow nicely and sell it when I want to, not when I need to. 

Back to the grind...

 

[Laguna21]

I'm with hello in terms of real estate investing, looking at numbers, market cap rates, cash flow, etc.

Used to think that it's nuts to invest in high demand areas because of the numbers not making sense, would like to be at this level, where I have a larger portfolio and want to diversify, and I can put tons of equity down on high demand areas which it'd cash flow nicely and sell it when I want to, not when I need to. 

Back to the grind...

I'm not disagreeing with @Hello entirely. I agree that you need to look at ALL of those variables before investing. I didn't just plop money down on the condo in SF without looking at the numbers too.

I'm simply pointing out that sometimes you need to take risks in order to gain a higher reward. Of course investing in SF was a huge risk, as is any real estate priced that high. I'm not saying it would have been the same outcome for anyone else investing at the time. In some ways I do feel lucky, but I did do my research, and was very thorough about it.

But investing in real estate is not JUST a numbers game. You can't base your decisions of investing solely by use of a calculator. A LOT of other variables came into play. What's the market like in SF, trends, rent control & how that impacts the overall real estate climate and so forth. I could go into SO much detail that it would bore you to tears.

I've invested my time into tech businesses that I started literally from the ground up - out of my own house. I had almost no savings to my name, and was cash flow negative for almost 2 years until I finally made 7 figures.

It takes extraordinarily hard work & dedication, & it takes sometimes failing to realize your past mistakes.

I think @Hello has sound advice, but he's also playing it extremely safe. Which is totally fine, if you just want to be fine. I could have continued to clock into my 9-5, but I wanted more out of life.

I wanted my own business, to make my own hours, and after much dedication and work, I was able to do that, and have been doing so for 7 years now, and starting a 2nd tech business that I own & operate, and is cash flow positive, and on the rise. And because of the success of my biz, I've been able to invest that money in real estate, and other investments, and inspired friends become entrepreneurs in the process, one of which just became successful after 2 years of work with his tech startup.

I tend to take more risks, and so far, in the process, in both business and real estate, it has proven to be a successful formula for me. That's all. Not saying my formula is for everyone, but playing it safe isn't always key. But I have real world experience to back up my claims and so far it has worked for myself, my family & other investors whom I've spoken with. Real life experience, not just crunching numbers on a calculator.