Prime Opportunity for Investing/Buying in the Southern California Residential Market

In August, 2011, the California statewide median price for a single family home was approximately $297,000, an estimated 7% drop in price from 2010, BUT an 8% increase in sales volume from one year ago, per California Association of Realtors.

The lowest median single family home price in California in our current cycle was $274,000 in 2009; and $303,010 in 2010.   Los Angeles County median price for a single family home in 2009 was $333,920 and for 2010, up to $346,840.

And yet, current distressed property sales continue to make up 40%-50%, and more, of local markets, with a recent huge increase in foreclosure properties within the last month.  These trends show how opportunities will continue to bring more investors and more private money into the market. Traditional financing, i.e., FHA and FNMA, has introduced some types of requirements that discourage the present pool of buyers, that private investors with money to lend are entering the marketplace, because they believe that property values have hit the lowest point in most areas. 

There is a need for the rehab and re-sale of distressed properties in disrepair, yet traditional financing doesn't offer that vehicle for those with the goal of "buy, fix and sell." Investors who don't fit the box for traditional financing avenues do have these private money alternatives that may work for them:
  • one-year loans for flip properties--no pre-payment penalties
  • stated income applications for flip properties
  • loan amount to be based on 60% of private lender's determined value of property
  • also available are constructions loans based on "repaired" value of property
  • on site appraisal and photos may not be required
Interest rates for these short term investor loans are higher than standard FNMA-type financing, however, they are also a vehicle which is more lenient on the borrower's prior financial events (i.e., short sale, foreclosure issues), and they are geared towards the eligibility of the property, and the case-by-case history of the borrower.
If you are looking for opportunity in the investor property market for 1-4 residential units, contact me for more help on finding the property and the financing!

1 comment:

Mark Bratton said...

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