Sometimes I hate California. California real estate is already overpriced. I know that. In Southern California, it feels like everyone starts doing stuff at the same exact time, making it miserable for everyone involved. Examples:
- Going to Disneyland on a Saturday in July
- Driving on the 5 or the 101 pretty much anytime of day but especially during morning and evening rush “hour” that lasts for 4 hours each
- Wearing leggings with flannel shirts and crossbody brown leather bags
- Deciding now is the time to buy real estate
Less than a year ago, the market in California was still pretty depressed. Every other real estate agent was complaining about how they had second and third jobs just to make ends meet, and the news was still wondering where our “bottom” was. I started talking to realtors about 12 months ago (even though I knew I wasn’t ready) and their tone is very different now that I am ready and pre-qualified* to buy. My goal is to buy in an area that is nice but not too nice and will work as a rental. I don’t want to sound like my real estate agent, but inventory is slim. When did everyone start buying property again and making crazy overpriced offers? The fact is, there are too many damn people in California and too many of them are cash buyers which makes it hard even when you have a 20% down payment ready. Look at this article. I hate these people. Although the sellers are asking you to write into your offer that it will stand “even if the appraisal comes in lower than your offer”, you don’t have to do it. Don’t give in to the crazy! My realtor mentioned one of these and I said, “Nope. Get ’em outta here.” I don’t care, I’m not going to do that! I want to own real estate and be an investor as well, but I will buy out of state if I have to. Texas is not that far and people are happily living and working there. I have a ton of family in Texas (who also happen to be business-savvy and own plenty of real estate) and my good friend’s mom also own rental property there and would be willing to help me research the market.
But all hope is not lost for California. It pays to be in tune with construction and development. There are developments happening in the area (south and central Orange County), along with huge infrastructure projects like freeway and transit projects. So I know that even though there are some areas I really like and can charge rents above my mortgage payment, there are some neighborhoods a notch or two below that will also work out in the long run. The areas I really like have those demanding sellers and units being sold after 4 days on the market. The up-and-coming areas have more inventory and less demand, and lots of rental demand because there are large employers around and people who commute to LA for work. It won’t be as nice or exciting, but I think that’s what being an investor is all about. Can I make the right, rational decision? I hope so.
Just as long as there’s a hot tub at the end of this tunnel.
*I got pre-qualified for a mortgage! But it’s my intent to have all credit card debt (~12k) and most student student loan debt (~5k) paid by the time I make my first offer.