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Where' the Bottom of the Burbank Real Estate Market ?

I spoke with Burbank real estate specialist, Ana Connell, today.  Ana's "other life" paralleled mine; she was a manager for a securities brokerage firm before she started her career in real estate brokerage.  We chuckled as we talked about the principles of technical analysis and how it might apply to residential real estate .  I want to share the product of our discussion with you, the Southern California property buyer.

I think that the real test of proper pricing for Southern California real estate is revealed when we analyze properties like a long-term investor may.  We are getting close to parity here.  If a property can create net positive cash flow, with a 20% down payment, and a a current market rate, interest-only loan, the game's over.  Long-term investors will flock to that purchase no matter what the near-term pricing does.

Here's why.  Investors believe in the long-term viability of the Southern California residential market, they just don't like the short-term negative cash-flow.

eg:   The unit can produce $2150/month in rent, what is a "safe" purchase price?

ANSWERS HERE

7 comments • Brian Brady- America's VA Home Loan Broker • October 10 2007 02:01PM

Comments

click through Michael.
Posted by America's #1 Mortgage Broker/858-777-9751 over 2 years ago

Thanks for the post.  When investors are ready to return to the market....  They are ready now, at the right price.  Investors are in the market all the time.  The 20% down to buy an investment property is not what the true investor is looking for.  (Just my 2 cents)

 

Posted by Dan Forbes over 2 years ago

the 20% down to buy an investment property is not what the true investor is looking for.  (Just my 2 cents)

What are they looking for, Dan? 

Posted by America's #1 Mortgage Broker/858-777-9751 over 2 years ago
I think it depends on where you are looking.. in most of the local Beach Cities.. rentals have never made sense using any type of standard model.  We are certainly well over where we should be.. but we never fit the mold.. Our investors often have a different agenda when dealing in these neighborhoods..It's what makes CA rel estate so interesting
Posted by Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) over 2 years ago

Brian:

I agree with Kay.

I have purchased apartment buildings in Texas using common sense formulas--and made money doing so.

I have purchased properties in Southern California because they took my heart away--and made money doing so.

 Go figure.

 

 

Posted by Roberta Murphy - Carlsbad Real Estate North County San Diego Realtor (San Diego Previews * Previews Luxury Real Estate) over 2 years ago
So, how would you determine that we're close to the bottom, ladies?
Posted by America's #1 Mortgage Broker/858-777-9751 over 2 years ago

Bunk, BUnk, BUNk, BUNK

I don't believe you can apply the principles of technical analysis to home purchases! Nor do I believe you can apply them to small (1 to 4 unit) investment properties in a tough market.

No one likes to crunch numbers more than I do. Many years ago as an expatriate banker I got to learn from the best. For the rest of the story: Bunk, BUnk, BUNk, BUNK

Bill

William J Archambault Jr

The Real Estate Investment Institute

First National Mortgage Sources

Posted by William J Archambault Jr (The Real Estate Investment Institute ) over 2 years ago

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