California Real Estate Investors Beginning To See The Light
Posted @ 11:05 pm - Filed under 1031 Exchanges, Real Estate Investing, Market Correction, Investment Lessons
Spoke with several west coast agents today while at Unchained conference in Phoenix. Bay area, L.A., Orange County, LA Beaches, and Oakland were represented. When asked about local real estate investors’ outlook in their areas, they were unanimous in saying local real estate for the most part isn’t on their menus any more. They’ve become fairly disenchanted with local real estate all over the Golden State.
When the stark reality hits you — under no circumstances would you buy your own investment property at the currently reduced prices — that’s when disenchantment finds a home.
Was chatting with a very bright San Marcos (north San Diego county) who said folks simply won’t sell for $50-100,000 less than they would’ve gotten three years ago, when the market correction started. I went on to say that their retirement income wasn’t gonna magically appear just ‘cuz they needed it to. It was gonna take a Purposeful Plan. He then asked for a more in depth explanation. Well, thanks for askin’ podner.
It’s simple as pie. ‘Lose’ $100,000 while netting $400,000 in sale. Exchange (1031) for $3 Million of property in various growth regions. New stuff ‘only’ appreciates a relatively pedestrian 5%. The first year that’s — wait for it — here it comes — $150,000. Or, put another maddening way, they got their ‘lost’ $100,000 back plus an extra $50,000 in a year or so. Plus, they’re Outa Dodge, own 4-8 times the property as before, increased their tax shelter by a factor of 3-10, and instead of owning property older than Grandma Moses, the new stuff is 0-5 years old.
To use a real estate investment ‘technical term’, the above scenario is often referred to as a no-brainer.
And the choir sings…DUH for a count of four beats.
Gotta hit the hay as I’m first up tomorrow morning. What sane person goes somewhere at 8:30 AM to hear a comatose BawldGuy — regardless of what he has to say? Not happy with the scheduler dude. Not one bit. 
Find me and tie me down for a chat on the phone. Use the Contact BawldGuy doohicky — it works every time.
Talk to you tomorrow.
This entry was posted on Monday, May 19th, 2008 at 11:05 pm and is filed under 1031 Exchanges, Real Estate Investing, Market Correction, Investment Lessons. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.