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Real estate bubble.... buying in two years better than buying now?

  • Thread starter Thread starter Deleted member 4644
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Deleted member 4644

I am looking to buy a small rental property in Los Angeles.. maybe a duplex or 4-plex that I would also live in. Prolly would cost around $1 mil at current prices. What do you guys think about buying now vs. the market in about two years? I expect I would hold this property for at least 10 years.

Oh, and in LA right now the cap rate is around 4-5%, which is about what I am making on my cash right now.
 
if you don't mind doing some leg work you could probably find some good deals with foreclosures.

where specifically are you looking? west side? the valley? inland empire?
 
Originally posted by: Ameesh
if you don't mind doing some leg work you could probably find some good deals with foreclosures.

where specifically are you looking? west side? the valley? inland empire?
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West LA to the Mid-Wilshire area probably.

I don't know much about foreclosures.... also, doesn't that mean that the property was in trouble for some reason (i.e. maybe a bad location or poor curb appeal or high maintenance?)
 
The odds of properties going down in value is VERY low. Odds are, prices will keep rising, but slower. When dealing with investment property, you want to look at what your balance sheet will say at the end of every month. If the rent income will pay your mortgage, then by all means consider getting it now. If the rent will not cover the payments, then look at what you can afford. Don't try to bet on interest rates or pricing because the odds are against you. It's almost always better to look at the here and now and move forward accordingly.
 
The mere fact that you're asking in ATOT means you're a speculative buyer. That's already strike one against you.

For investment properties, you have to consider the ROI. In today's market, it's hard to obtain an industry established 20% ROI without accounting for appreciation. Will the property appreciate enough per year to get your 20%? I doubt it. You'd have to find some good ways to decrease your maintenance costs to do so.

But if you're looking simply to build equity, forget the ROI and just buy it.
 
Originally posted by: XZeroII
The odds of properties going down in value is VERY low. Odds are, prices will keep rising, but slower. When dealing with investment property, you want to look at what your balance sheet will say at the end of every month. If the rent income will pay your mortgage, then by all means consider getting it now. If the rent will not cover the payments, then look at what you can afford. Don't try to bet on interest rates or pricing because the odds are against you. It's almost always better to look at the here and now and move forward accordingly.
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He's in CA, almost everywhere has already gone down a bit. I'd wait until summer and see where the market is heading, personally i think a whole bunch of inventory is about to hit the market which will push prices down.

 
Gawd I HOPE NOT!...I want to see the market kick back up again, so my house will gain more value before we sell...gotta see the interest rates drop more however (IMO) before it will take off again.
 
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