Dear Real Estate
Investors,
Aren't you happy you're in real estate investments now?
After the stock market crash and subsequent Wall Street
bailout, my phone has been ringing off the hook! Real estate
prices are down and there is no safety in the stock market and
no returns or tax shelter in money market funds and
certificates of deposit.
Local investors are now out in the market, scooping up
deals on foreclosures and short sales, and adding to their
investment property portfolios. What is selling now?
Foreclosed condo's in San Rafael and Novato, once selling at a
peak of $450,000 are now trading for $140,000 and up. If you
do the math with 25% down (investor requirement for a
downpayment), rent the unit out for up to $2,000 per month in
some locations and pay your expenses, you will have cash flow.
Other investors are buying distressed single family homes
(foreclosures and short sales) with the intention of renting
them out until the housing market starts to climb back up.
I sold a foreclosed house in Mill Valley last week for
$550,000. This was not a shack-only needed kitchen and
bathroom remodel and it will be worth closer to $800,000 even
in this market. There are deals like this all over Marin, you
just need to find them and buy at a steep discount. Sometimes
foreclosures need more work than a short sale. This is where
the owner is up side down on their mortgages (they owe more
than the property is worth in today's market) and they seem to
be the best deals out there. The downside -it takes sometimes
months for the bank to respond to an offer. But in the
meantime, the owner is getting more motivated to sell, and the
price becomes extremely attractive for an
investor.
Other opportunities include buying in to new
construction subdivisions (not so many in Marin, but many more
in Sonoma and Napa counties) where the builders are giving
concessions to get the inventory off the books. I did this in
the last down turn and got the builder to carry some paper.
The next year the market turned up, I refinanced to pay him
off, and four years later sold the property for double what I
paid for it.
Smaller apartment complexes are selling in
Marin-usually priced from $1,000,000-$2,500,000. This is the
most active price range, with gross rent multipliers from
12-15 times rents. Location determines the final gross rent
multiplier selling price, as well as amenities and upgrades to
the property. Most of these properties are being offered at 4
caps but returns can be increased as soon as rents are
increased and expenses reduced.
Please call me office if you are interested in viewing
any of these or are interested in meeting with me and
discussing your particular real estate investment needs.
Happy hunting!
Katherine J. Higgins
Investment
Broker
Mobile: (415)
302-7730
53 West Blithedale