Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
Any opinions good or bad about La Quinta Cove? I'm thinking about buying one or two rental single family homes in this neighborhood.
Homes priced $130-150k appear to rent for $1200-1350/mo. in good condition and at least moderately updated.
I looked at some dogs too but since I am out of town, I don't think I want to rehab extensively.
My questions/concerns--
--The quality of tenant in that area?? Although I own property in questionable areas and luckily haven't had problems but I know what to look for in my town.
Involved In Real Estate · Rancho Mirage, CA · Member since 2012 · 1 post · 0 votes
14y
It looks like you have done your research. This is an active rental area with young families due to the good schools, decent rent prices and nice community with plenty of activities and local pool, skate park, tennis courts, shopping, etc.
Homes still rent in the summer, if you are looking for a year round renter. Vacation rentals are more active in the season - January - April. You can get double the rent approximately during those months.
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Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
14y
Thanks Elizabeth!
We are only looking at long-term renters because I don't want the hassle of seasonal, utilities, etc. Which is your listing in the list? We saw a lot of property last week.
Do purchase prices go down in summer when the snowbirds leave?
Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
14y
Shari Posey we don't have any rentals there, but have been very successful on some flips. While your price/rent numbers are accurate, I wouldn't consider those very good rental numbers unless appreciation is a big part of your equation. I don't think the cove is as good for long term appreciation as it is for short term arbitrage. Just my opinion though.
Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
14y
LaQuinta came into my radar when I was searching Lake Elsinore, Temecula, and the Cochella Valley. It appears to have the lowest entry point ($140k) for a good-size SFR (min. 3BR/2BA, 1400+sq. ft) without melo roos and decent rents.
We are looking at this as a long-term investment. We have 3 other rentals in Long Beach we bought a long time ago and will keep forever for cash flow. I agree it probably won't have the appreciation like near the coast but where does?
I am very open for suggestions of other locations but I really don't want anywhere farther than a 2 hour drive. We had a rental in TN once and it was a hassle; once bitten-twice shy.
Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
14y
Lake Elsinore and Hemit are also good spots.
I know a few investors who've purchase stuff closer to the 80K price point. I'm not in the market so I can't speak to the location or quality of tenant. If you are set on La Quinta, perhaps multi-family may be the better bet for long-term cashflow. As you probably know, expenses on a 140K SFH will eat up much of the cashflow overtime (maybe not immediately).
Another market is the Inland Empire. You'll have to do a bit more digging these days, but there are still deals out there.
Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
14y
I took a quick look on the MLS for Hemet and the prices are about 15-25% lower than LaQuinta. There are 1700-2500 sq.ft houses in pretty good shape around $120k. Some small fixers under $100k. The question I need to find out the answer to is how are the rents?
Is State Street a dividing line? I've driven though the area but I'll really have to check it out.
La Quinta doesn't have too many duplexes. We looked at some in Palm Desert but those numbers are awful.
Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
14y
Shari Posey - be sure to check out Lake Elsinore as well. Regarding rents - check out rent-o-meter, craigslist and call a few property managers.
There are a few 55+ communities in Hemet/Temecula area. I know an investor who's purchased a few and has done quite well with them.
Another strategy is to look at Pre-fabricated homes. There are a couple of nice communities in Lake Elsinore that Sing family units priced at 50-70K. These won't appreciate, but they will probably yield better cash flow over the long-haul.
Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
14y
The cash-on-cash is about the same for Hemet and LaQuinta...I think I like La Quinta better because there are really good adjacent areas and I'm not sure there are any really good areas in Hemet. But just recently La Quinta seems unreasonably high...$140k for a crappy flip--compared to $115k just 4 months ago. I think almost everywhere is seeing this little spike in prices. I'll have to wait it out a little.
I don't like the idea of owning manufactured housing but maybe that's a little snobby of me and not thinking financially.
I kind of like the 55+ idea but I always worry a little about resale down the line since it's a limited market. Although I guess you end up selling cheap because you bought cheap for the same reason. Any personal experience with those communities??
Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
14y
Shari Posey - I like buying cheap SFR between 50-80K with long-term financing at today's market rates.
If you are interested in the La Quinta market, my suggestion would be to NOT look in the MLS. The word is out, everyone wants in on rentals. Your best bet is to farm a few zip codes in your target market and find a distressed seller and handle the short sale internally. Even if you don't end up buying the property, you got a listing.
I think the real gold in manufactured housing is carrying notes or assuming loans and reselling it with owner financing.
As far as 55+ communities are concerned, I think it all comes down to your business model. A niche works both ways. You have less competition, but you also have less margin of error.
As far as waiting is concerned, I think you need to consider the other component of today's market - interest rates. Locking in a ~5% mortgage for 30 years is a great way to shelter your wealth and grow your capital. IMO, the purchase price is one half of the deal, the other half is the terms.