All Forum Posts by: Osazee Edebiri

 "let's not go there" is the whole reason people are leaving. 

Other states don't have those features, but they do have others-for example TN has beautiful country properties that people can actually afford. Did you know Somalia has one of the most beautiful, untouched beaches in the world? Would you live there? 

All the things you mentioned are HUGE +++ to the state. It's truly one of the most beautiful states in the country, but those things can only keep people there for so long as I believe you have had a net out migration of 350k in the last year and lost a congressional seat due to continued population decline. 

 
My own view: the answer is in the linkedin/zip recruiter/monster.com 

Find city/metro that has largest number of engineer job opening per square miles.

So you'll find:

San Jose,CA ; Burlingame,Ca ; San Francisco,CA ; San Diego,CA ; Austin,TX ; Raleigh,NC ; Boston,MA, Seattle,WA and maybe even Huntsville,AL.

Go follow the trail of money........and split the bet accordingly to those cities. Invest for 15 years and forget.

@Osazee Edebiri Your hypothesis needs to be narrowed a bit more. The Bay area is much different than LA. LA is much different than Sacramento. Texas is also very different from one location to another. Austin is very different than Houston. Dallas is different than San Antonio. Each location has their own particular zoning and building constraints.  And then there are the small town differences where the cap rates tend to be higher than the larger metros.  Let's consider San Francisco vs Oakland. Or how about Sacramento vs Dallas. You will have very different outcomes based upon the locations and even more so within the submarkets within those locations. Your hypothesis needs to be narrowed a bit more, imho. 

Around 20 years ago we purchased two OOS properties. I loved the location of both but especially one on the sand at Gulf Shores Alabama. The other was lake front in Alabama. We sold them both because our San Diego RE was performing far better. Two hurricanes hitting the Gulf Shore RE in consecutive years was also a factor on us selling that property. The properties were not appreciating like San Diego. the cash flow was going in the wrong direction because the STR rents were not going up as fast as the property tax and insurance. Our insurance on the Gulf Shores property went up something like ten fold in just a few years (going from memory). There were two large claims for the damage from the hurricanes.

There are times that I wish we had kept the Gulf Shores property, but it is not because I believe it would have produced better return than the San Diego properties.  It is because a duplex like that does not exist in Southern Ca and, if it did, it would be >$10m.  

Our San Diego properties have produced great returns.  The rents compared to purchase price is incredible.  The appreciation has been incredible.  The property tax is very reasonable especially on the longer hold properties (thanks prop 13).  The insurance has increased at reasonable rate.  

Aha, I can't tell ya bro....you'll roll in with all your fat Cali money and buy it up.....

Why? Because I've been seeing it happen, at least in shorter term appreciation. And the trend looks to continue and grow.....

Well @Carlos Ptriawan. You did forget to put Las Vegas on your housing appreciation list from 2009 to 2022. We went from $209,000 to $480,000. 130% in 12 years. So I’m guessing we compared pretty favorably. Especially with lower insurance, lower property taxes, and no income tax. You might even say it woulda have been a better investment than any of your examples. The rent to price ratio is probably better and again, tax free. 

So I’m guessing you’d make more from the renting part of the investment because of lower costs and keep more of the net because of no taxes. Especially if you suddenly decided to sell the appreciated properties and compare the net gain after those taxes. And don’t forget. Nevada doesn’t hate landlords like California does. Though, as more and more flee the golden state for the silver state, that’s unfortunately slowly changing. They never remember what or why they fled. 

Again. My main point is if you lived in Florida or New York, Texas or Minnesota, you wouldn’t be saying the best place to invest in the country is California. 

Two old sayings:

1) It’s easier to fool people than to convince them they’ve been fooled

2) What’s the worst state to do business in?  And why did you say California?

@Osazee Edebiri I guess that it would depend on the measurement of performance. If you are looking at cash flow, which is my measurement, then Detroit is the best in the country right now at a 2.2% rent to purchase price of the property.

 This is really the case with virtually all investments. There's virtually nothing safer than just sticking your money in a savings account or bank CD, and probably virtually nothing easier. That's why it pays peanuts. Real estate - especially if you own/manage your properties - has a fantastic return, but it's hard work and anyone who thinks otherwise either hasn't owned anything or is comparing it to something really hard like working in a 3rd world country. That hard work is why most people will never invest in real estate (other than their primary home). And then within RE there are gradients of work. I personally think solid B housing/B neighborhoods/ B tenants are the easiest work of all, and it has good returns - but not as good as C or A, which I think is more work for different reasons, and definitely not as good as D. I have an acquaintance who owns a trailer park with 150 units - most park owned but a few tenant owned and they rent the land. His returns are much better than mine, but he works his ***** off for that return. He's a fixture at eviction court. He has junk haul off companies on speed dial. ETC. He wants that oversized return, and he gets it, but he doesn't get it for free. 

I am going to be selling my primarily home. I bought it for 275, 000 and they are saying it it worth 
$616,000 - $876,000 nowt

This is ridiculous - It is still an ugly pig. But that is the Bay area.

I will not rent in California - I vote blue - but sheesh there are no protections for landlords in this state! My friend is always late - and she is tolerated because she pays. 
takion
I have some very nice neighbors that are interested, I will want them to qualify for a loan, but I have thought about taking a second back so I get a stream of income as well as the payment.   What says you? What if they default on their payments.

Hey Rose, 

Taking a second back is similar to you renting based on the way you feel about California. Plus with loans, it’s better to be in the first position so they have to pay you first. 

So I would say just sell traditional or get them to do a first position loan with you.

The are other options too if you need to avoid paying capital gains tax.