A Very Saturated Market.

10 Replies

So, I am located in essentially the heart of LA, right in the middle, I have yet to make my first investment but while I'm still learning I've come across certain red flags about my area. For example I stumbled upon this article on the housing markets and this little excerpt was kind of startling.

"Even at the peak of the bubble in 2005, only 11.5 percent of homes in Los Angeles were purchased by absentee buyers -- now 25 percent are. Over the past decade in Miami, only 33 percent of homes were purchased by absentee buyers, while in 2012 42 percent were absentee. In Las Vegas, a whopping 51 percent of purchases consisted of absentee transactions; while this is more typical in a vacation destination like Las Vegas, that total is still a full 10 percentage point higher than average. -Ilyce Glink"

Now by no means will this deter me from pursuing my REI dreams but it does make me rather cautious about trying to make my area my primary market. My question is, would anyone suggest me starting here and just do my best or start somewhere else more practical.

This brings me back to another excerpt from this book I'm reading called The University of Success, and in this little passage there was a short story about a man. A man who wanted to find diamonds so that he could sell them and feed his family forever. To summarize it a bit, he went on this journey and was unsuccessful, he couldn't bare returning home empty handed so he flung himself into the ocean never to be seen again. Back at his home where there was someone new living there and while he was out back letting his animals drink he noticed something shining at the bottom of the river bed. He dug it up and sure enough it was a diamond, he had stumbled across the biggest diamond mine ever. The moral of the story was to Grow and prosper in our own acre of diamonds.

I want to succeed in REI more than just about anything in this world, and nothing can stop me, thanks for reading.

@Myles Coles  L.A. is definitely a crowded market. Lots of people there trying to make a buck on real estate, but California is big, and there are areas that are easier than others. What one man can do another can do. Educate yourself, set goals, take action. Most people start from nothing. 

Here is one of the most inspiring stories of rags to riches, to rags... to riches again. He is a buddy of mine named Billy. Watch his story and it will definitely make you feel better about where you are starting from. Plus, it will inspire you. It still inspires me.

http://youtu.be/xx9UeTNKFek

Hope that helps.

Yea man I just finished the video, that was beyond inspiring. I plan on watching this every week to keep my self on track, Thanks @Andy M.  

I'm in southern CA, but I don't limit my investments to only CA.  You need to do your market research and determine the best market to invest in.  There are two types of investment (regardless of asset type):  Appreciation (boy low and sell high) and Cash Flow (buy and hold).  The East and West Coasts are great for appreciation deals (and so is Texas), but the Midwest is great for buy and hold.  Determine your investment strategy first, then research which markets fit your strategy, then look for specific properties within that market.

God Bless You!

@Myles Coles  Isn't Billy great? I can't believe that he was able to pick himself up and start rocking again. He really is an amazing person and an inspiration. I'm glad to call him a friend. I'm glad his story helped you. :)

@Michael Evans   I would like to know how do you go about getting your market research that you need for the areas that you are interested in investing in. 

A lot of the time when I'm doing this I'm finding 2 to 3 years past data & not really up to date data like I need. I'm just wondering if I'm looking on the wrong websites or should I be aiming in a different direction to gather this information from a specific source(s)? 

Thanks

For Texas, use this link: http://www.recenter.tamu.edu/.  This is the most accurate up to date information for the Texas market, period.

My team will; be visiting Texas on October (starting with Austin - San Antonio corridor and then Houston and DFW).  Texas is probably the hottest market in the USA.  Strong economy, strong job base, short supply of homes, home builders are going at it like gang busters.  These are all of the signs of a super strong market.

God Bless You!

@Myles Coles  

You already have the answers, real estate markets may look saturated but there are gems out there!  I find good deals and make them great...  If you think there is nothing local, you won't see it, but if you look all the time you are driving somewhere, it will be found.  I may not buy a lot, 1-2 a year, but they pay me twice, once with equity when bought and again with either flip money or a stream of rental income.  Just remember, deals are left that may not have enough $$$ for the big guys but has $$ for the small guys, so get up off the computer chair and look! 

@Michael Evans is right about the Texas market. I live in Austin and it is amazing to watch the appreciation month over month. A very nice little bonus at the end of our flips!

That Billy Alvaro youtube interview was good. Lot of gold nuggets. Thanks for sharing @Andy M.  . I am in LA market too and I hear it is a lot more saturated than most  RE markets in U.S, but the flipside of that is you usually make more off 1 deal on average than in other markets. Also since housing prices are higher than most other markets, it is harder to cashflow because price/rent ratios. But since higher prices more opportunity for profit spreads if your exit strategy does not involve just buy and hold. Always two sides to a coin.

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