[911Freak]

Originally Posted by McLovin

I'd be interested in seeing how an investment property/single family rental house could pencil out to cash flow (or even come close) in any part of Southern California. Seems like buying a single family house as a rental is a bad idea anywhere in So Cal, pool or not.

It's important to remember there are so many micro-climates of the real estate market here in So-Cal. Some places are a renters market where rents have plummeted in the last couple of years and landlords are happy just to have someone paying on time, other areas (sometimes only 5-10 miles away) you can cash-flow pretty easily if you buy right.

Our investors buy pools of sfr/mfr and either rehab and flip or minor rehab and lease-long term hold. You can find the cash flow areas using a few tools of the trade. I don't want to divulge these as I've paid my dues for these metrics but suffice to say if you make an acquisition in So-Cal close to 2001-2002 value with light rehab you'll pencil out with a cash purchase (you'll still make a better return then that cash sitting in a bank somewhere).

If financing the acquisition (up to 75%) an investor can still positive cash flow if buying at 01-02 prices. Ignore current market value (totally speculative here in CA), look to past sales prices and current market rents.

The real money right now is in buying broken condo projects, completing them and either selling or renting them out. These assets have been taken over by the banks (or are in receivership) and the banks are motivated to sell quickly and get them off the book as they can't invest more capital to complete them. Unlike single sfr where they'll list them with brokers and get a higher % of what their into them for, these are dead paper, already written off as loses and provide a quick source of badly needed capital to the institutions.

ymmv

Lots of action in this area