I am currently renting but have been in the market for a 4bd house for what seems to be forever. My budget goes up each year but so do the prices. I think I am going to be looking at resale homes in older communities with no hoa or mello roos where the house may not be in good shape but I could gradually fix it up. My question is are investors really looking at houses in Irvine. With prices so high I cannot believe anyone is making any money from rent. So what are they doing? Will demand go down when they wise up so I can buy a house for a little cheaper?
Why are investors looking at all?
- Thread starter shahshah
- Start date
Burn That Belly
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J
jmoney74
Guest
shahshah said:
You gotta just get in. Time value of money.
Yes, investors still love Irvine because of it's stability. They view it as safer than the stock market and can park big cash into it. That being said, the rents are really high as well so they can easily "make" money while parking their cash without having to worry so much about market dips.
J
jmoney74
Guest
undecided said:
Just win it already!
Irvinehomeseeker
Active member
look at new homes put up for rent..you will see quite a few new petaluma and trellis court homes...they are all atleast 850 to 900k ...investors are buying , even 1 million ones like marin, piedmont are available for rent.
potsticker
Active member
Just had an investor client pick up an Orchard Hills resale. About 30% down and rented it, although he's putting in an extra $300/mo. This wasn't a big deal to him - he wanted in OH as he thought it was a safe place to park cash and could attract low maintenance tenants.
I know a couple more investors who are on the sidelines, with a lot of cash, ready to pounce if the market dips.
So to the OP (original poster), you might as well buy now. Because if there's even the slightest dip in the market, you won't be able to compete with the all cash investors on the sidelines.
I know a couple more investors who are on the sidelines, with a lot of cash, ready to pounce if the market dips.
So to the OP (original poster), you might as well buy now. Because if there's even the slightest dip in the market, you won't be able to compete with the all cash investors on the sidelines.
woodburyowner
Well-known member
shahshah said:
Exactly. With RE investing there is cash flow or appreciation play. Irvine is definitely an appreciation play where the investor will have negative cash flow (assuming standard down payment) with the hopes that appreciation will catch up later. At the end of the day, it's all about the IRR.
usctrojancpa
Well-known member
I have a client who is looking to rent in Eastwood before they buy they and man there are DOZENS of rentals of brand new homes. Ones that have sat for months too because the owners are asking too much for rent. A lot of the chinese buyers love to buy those new homes. Pretty soon there won't be any new homes to buy and you'll see prices for resale homes take off.
usctrojancpa
Well-known member
woodburyowner said:
Except for those cash buyers who have low monthly carrying costs. But yeah, they are looking at 3-4% cap rates.
Burn That Belly
New member
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Hmm so if investors and locals are playing the appreciation game with investments and not worried about the month to month costs then it seems have to look a this a bit sooner then I was hoping. Where should I be looking for a 4bd with a 825 budget if that is even possible? I was hoping to maybe find a home that wasn't in the best of shape for less and then may put the remainder in to it to come up to the 825 number and with low HOA and maybe no MR I was thinking older is way to go?
potsticker
Active member
Hard to find in Irvine. Older communities in Lake Forest will run you mid $700's for the type of property you're looking for.
usctrojancpa
Well-known member
shahshah said:
You can find a 4 bedroom home in the high 800s in West Irvine and Tustin Ranch.
shahshah said:
Keep an eye on this future new development in Portola Springs Neighborhood 4B which should be coming within the next 6-8 month.
This PS-4B will have two track, one is exactly the same as Trellis Court and other has both detach and attached units. Since PS has always been a slightly lower demand area, builder and developer will price theses product accordingly and should be significantly lower than homes in the other villages. That Trellis Court successor should be a lot cheaper than the Trellis Court in CVE.
Also there will be a large public park and a new elementary school within walking distance in the future. These two new tracks look very promising for those looking for value. You will get a Lake Forest price but at Irvine location.
The location is further out but the area is very quite and feel very secluded. The location might not be for everyone but take drive up there and see if the area will work for you.
And if you are seriously interested in these, get pre-qualified by the Cal Pac's prefer lender and be on the list as soon as they open up so you have a good chance of buying one of the phase 1 homes that has the lowest asking prices.
NW would be great but the price for a 4bds are out of reach I feel now.
If the appreciation play is just speculation then wouldn't this suggest that if the market goes down investors would be more likely to jump ship to cut their loses. Opening the door a bit?
Someone mentioned alot of investor cash is on the sideline as it is (true?). Can anyone speak to how investors that own have responded in a falling markets in the past?
If the appreciation play is just speculation then wouldn't this suggest that if the market goes down investors would be more likely to jump ship to cut their loses. Opening the door a bit?
Someone mentioned alot of investor cash is on the sideline as it is (true?). Can anyone speak to how investors that own have responded in a falling markets in the past?
shahshah said:
If there's a real estate down market, majority of these investors will definitely not sell but possibly buy even more properties.
When there's a down market, both investors and regular home sellers think the prices are down and it's not a good time to sell and most of them will hold of selling. Why would home owners and investors want to sell when the price is down and there's no real need of selling.
And when the down market hit, the inventory level for existing home will go down significantly due to people hold off selling. The price might be good but selection is small and harder to find a good property.