Should I Buy in this California Market cycle?

[James Allen]

So I'm just closing on our first investment property in Atlanta, GA in the next 1-2 weeks. I should have enough cash in the bank left over for putting a deposit on our first live in residential place in California. I'm trying to make sure I'm buying at the right time however. 

Everything I've seen thus far about the market in California is pointing us towards hitting our peak of the market within the next couple years or so and there's not much to grow, also we're only predicted to have a small bump down in the market from what I've seen and not like the crash of 2008 from what I've seen. However, with mortgage interest rates predicting to go up this year and the next upcoming years and with their still being some room to grab some minimal appreciation along the way, I'm trying to determine if now is a good time for my family to buy a home before rates start going above 5 and maybe even to six in the next few years? Any advice would be appreciated...

[David Faulkner]

Originally posted by @James Allen:

@David Faulkner - completely agree, that's why I flew out there multiple times and have driven the streets, gotten to know the neighborhoods and which suburbs and suburb neighborhoods are booming and up and coming, which have good and bad crime situations, where are the good schools located, got acquainted with other investors, wholesalers out there. I would bring property management on board of course which I have interviewed multiple property managements. I've read a lot about atlantas plans of development including the belt line transportation expansion, MGM grand developing casinos, Mercedes coming to town and much more going on. I definitely didn't just get excited, jump on google and say Atlanta sounds fun. But can you point to some reasons why you think it's a bad place to invest? I'm curious cause I can't still pull out of this deal if there is a compelling reason. 

I hope it works out for you, but you are still basically going off of Google and advice of others. I don't think it is realistic to become familiar with a market visiting it one or two times ... I recommend newbies live in and study a market for 1 year before buying, and I practice what I preach ... the few times I did not follow this, I have come to regret it. I have been investing both in and out of state over the last 15 years and have nothing to sell you either way. I can say that I've sold all of my out of state stuff and if I had to do it over again, I would've stayed local.

The issue is not so much really whether Atlanta as a whole is a "good" market or not ... the issue is that you will be giving up nearly 100% control over your investment to others, and others may not be competent and/or have your best interests at heart. There are far more bad realtors than good ones ... there are far more bad PMs than good ones ... there are far more bad investment properties (in any market) than good ones. At best, you as a newbie are looking for a needle in a haystack that is 2,165 miles away ... I just don't like those odds for you my friend.

If you really like the Atlanta market, then my honest advice would be to move there, study it then, and invest as a local.