Posted by Rick, the Probate Guy on February 06, 2010 at 17:49:54:
In Reply to: High Desert California posted by cork horner on February 05, 2010 at 23:50:37:
I have several friends who are actively building substantial rental portfolios in the 'High Desert' communities of Lancaster and Palmdale, primarily counting on section-8 rents to make them optimized.
He purchased all-cash with his own pension money during the past year and all houses I believe are rented. He was paying an average of $60K/house for late model product, but this past week he indicated that the same house now costs him about $110K, but still cash flow really well.
Another friend, who has about 40+/- rentals in the Eastern L.A. area (i.e, Claremont, etc.) has indicated a plan to buy X properties in the Victorville/Hesperia areas.
I think the P.S, 29Palms and other 'low desert' areas are a different animal with different problems. One is that we haven't seen any sign of a bottom yet, even a "false" bottom. I don't know enough about the tenant mix out there to offer an informed opinion however I don't think the section-8 rents are anywhere close to those of the LA county programs so you might buy cheap but might still get squeezed.
Another friend, a t-sale buyer, had intended to buy in high desert areas but is now finding enough product close by to avoid the long distance. He's both a buy/sell and and buy and hold guy so I watch what he does fairly carefully.
As far as financing goes, private money is still fickle. You might find some regional lenders who are more comfortable with a given area than a larger lender whose investors are in pools.
Try looking at the local papers in the areas you want to invest in. Or, gauge the market and only buy seller financed properties that cash flow to your liking.
- Re: High Desert California cork horner 18:25:47 02/06/10 (0)