Sunday, May 21, 2017
If you are like me, you probably think the port city of San Pedro is nothing but an industrial port with huge cranes, shipping containers, cruise ship docks and the like. But no. The residential neighborhoods are really nice and so is the housing stock. Best of all, 3 bedroom 1600+ sf homes with ocean views are selling for under $700,000. That’s not a typo.
I learned about San Pedro when I helped my clients JB and Kristie buy a home there – we closed last week. The residential neighborhoods grew up in the 1920’s on the hill above the harbor. Most of the homes were built for port workers. The port is still quite active and there are lots of attractions around it, including a sailing marina, Ports Of Call (several good restaurants), a huge brewery, and the U.S.S. Indiana. Ports Of Call is being gentrified to the tune of many millions of dollars – check it out in a year or two.
Back to the housing stock. Most of the homes seem very well maintained. The few we saw all had basements, which were still being built in the 1920’s, and had layouts typical of the pre-war time period. Didn’t see any mid-century homes. With a couple exceptions, we also didn’t see a lot of mansionization. The most surprising thing for me was the ocean view at that (relatively) low price. It took about 25 minutes to get there from downtown L.A. – not a bad commute if you work on the west side of town. This area is certainly some place to consider for home buyers for the price, the view, and the housing stock.
Wednesday, May 17, 2017
Why you can't afford a house (Hint: it's not the avocado toast)." The title should link. The premise: some experts say that you can't afford a home because you are spending too much on life's little luxuries, such as lattes and avocado toast, and you're not saving enough.
Not true, say the three experts interviewed for the article. First time home buyers are as financially cautious as any other generation, and to say otherwise is, well, kinda moralizing.
And by the way, the article also cites a statistic that shows that California is the least affordable state for first time home buyers.
Wednesday, May 10, 2017
This home has just been rehabbed. Here's the video. https://vimeo.com/200290702/6dffd05f79 The tenant has a year lease, and there is positive cash flow at the end of each month, even after paying the mortgage, taxes, etc. Perhaps most importantly, it is professionally managed by the same company that did the rehab. Management is key when an investor is so far away.
Yes, I did the research on the neighborhood (I researched several other similar properties as well, in Milwaukee and other cities). And, I researched the appreciation trend in Milwaukee -- the city r.e. is rising in value.
Why didn't I buy rental property in L.A.? Because it's too damn expensive. Other parts of the country are so much less expensive than other areas. Shockingly so. This home cost $112,000. That's not a typo.
Still, isn't this risky? Yes, but it depends on what your investment goals are. IMO, it is only slightly riskier than managed funds, and less risky than hiding money in a mattress. I intend to purchase more properties like this in the coming months. If you would like me to find a property like this for you -- with positive cash flow each month and increasing in value -- please don't hesitate to contact me.
Wednesday, May 03, 2017
I am about to close escrow on a residential income property in Milwaukee, of all places. I am also brokering some other residential properties in other states. I will do a tell-all post about this another time. Sure, some things are the same; but some things are really different. Here goes:
Disclosures: here, we have about 100 disclosures for every single property sold. Some are just boilerplate; some are specific. Half the work here is getting disclosures to each party, getting them signed, and returning them. In other places, not so much. As a matter of fact, there were none in Milwaukee outside of the normal contractual ones. None.
Contract: here, we have four pages of mandated stuff to sign before we even get to the ten-page contract. There, it's just the ten pages or less.
Doing business: here, most Realtors return your calls or texts or emails promptly; if not within the hour, at least within half a day. In other parts of the country, they (ahem) take a little longer. For example, in the south, you are lucky to get a call returned within 24 hours, even if it is time-sensitive. I guess "time sensitive" really is a fluid concept, no? But they seem to do as much business, which leads me to wonder if we are all needlessly killing ourselves working here.
Termites: are bad, they're nationwide.
Septic tanks: far more common than we think, even if we don't want to think about them at all.
Loan charges and closing costs: are about the same across the country, with a few exceptions. Appraisals cost about the same, as do title policies. However, in most cases there are no escrow companies, so you do save some money there. A title company and/or closing attorney (we don't have CAs here) does everything.
Biggest difference: properties in other parts of the country can be super-cheap. Really cheap. Very, very cheap. Terrific cheap. So much cheap that you will get tired of cheap. Okay, I will knock off the presidential impersonation. But try this on for size -- 50 houses in Georgia for a total of $1.3 million. Here, that amount would get you about two dirt lots in the San Fernando Valley.
If you'd like more details on anything here, feel free to email me at firstname.lastname@example.org.