I am absolutely new to real estate investing and am so glad to have heard about BP in my local REI meetup group (wish I had found out about this group sooner). Like many new investors I thought that wholesaling would be good vehicle to use to build a piggybank to fund my goal of building a portfolio of rental properties (supplement my retirement) but it seems this method gets mixed opinions. Anyway, I'm currently looking at properties in Lake County, CA because prices are more attractive to a new investor. Any words of wisdom would be greatly appreciated.
The prices are more attractive but the appreciation is definitely not. Prices haven't even recovered from 2006 which is much different than Kenwood as you know. I wouldn't tell you not to purchase up there only do not expect much appreciation.
Lots I sold in HVL that were $30,000 are now at 5 or 6,000 and lots that were $21,000 in Clearlake can be had for 5,000.
Properties can be very rough. I sold a triplex for 105,000 that the owner had for 15 years and had purchased for 145,000 and that was 2007 so before the plunge.
In 2013 and 2014 I picked up several properties in Lake County. Specifically in Clearlake Oaks area. Martin is absolutely right on price appreciation. For me I was looking for cashflow rather than price appreciation. I felt that my investments in the area were so low that any loss in basis wouldn't hurt me too much. With that being said, the area has quality renters and poor quality renters. Trick is to find the right ones. My goal was to ONLY buy "Sticks and Bricks" homes. I wanted to provide a better quality rental opportunity and figured I could thus attract the higher quality tenants. So far so good. I have intentionally stayed away from the town of "Clearlake". I just haven't been impressed with the renter population over there or the home values. I have a local guy who does all my maintenance and handles all my rentals there. I pay him a fixed fee per rental and that seems to work well. It has to be "Win/Win" to make it work.
I can honestly say that I have seen prices go up in the last two years. Before you could find properties at 65 - 100K. Now it's all $100K plus for anything decent. One of the biggest problems in the area is lack of jobs. However, there are people on retirement and disability so there is money in the area to pay rents, just not a lot of it.... I have been able to get excellent returns on my investments so far. Over the long term we will see though. Head Martins experiences. I am very aware of what he suggests and agree with him.
I have found that there are opportunities in the area for seller financed deals. 3 of the properties I purchased in the area I utilized seller financing. Only way I was able to do it. To me that was a HUGE incentive to buy in the area. I wouldn't be able to buy them through a bank and wouldn't have had the opportunity to control the cash flow generated from renting the property.
thank you both for the information regarding investing in lake county area of Calif. I'm trying to gather as much info as possible
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