The current real estate market in San Jacinto CA has many investors constantly on the look out for good real estate deals. Many of our investors are now seasoned, however there are still a number of Johnny-come-lately's who want in on the action. Not saying that they can't play in this market, but they best know what they are doing or be in the hands of a seasoned REALTOR® that knows the ins and outs.
Here are a few tips on what you should avoid - for both seasoned and new investors...
First, Investors should never be ‘herd' animals. Yes, there may be safety in numbers - but just because everyone else is doing it is no reason for you to do it. I can hear my mom now, "If everyone was jumping off the Brooklyn Bridge, would you do it too?"
So please, decide which real estate investment niche is right for you in San Jacinto, CA and focus on it.
Second, do what you can to avoid buying your San Jacinto investment real estate at market value. Although at the moment there are many more buyers than properties for sale in San Jacinto be diligent and only buy when the right opportunity presents itself. In this market, no matter what you buy, you should be able to generate a substantial positive cash flow.
Third, if you are going to fall in love do it with a person and not a real estate deal. Spend the time and diligence finding the right deal. Know what your parameters are before getting in too deep and if it does not work out - don't try and force it. Sort of like any other long term relationship you may be getting into. If it doesn't feel right - it probably isn't.
Fourth, whenever possible use others peoples money and keep yours to do more deals. Look at it this way...lets suppose you have $100,000 liquid assets and you bought a home for cash - that's what you have one home, with no interest deductions, and 100% of whatever rent you can collect.
A better scenario, at least for your first 4 homes is to use Conventional Financing with 25% down and a low interest loan for the balance. Now you can control $400,000 worth of real estate for the same $100,000 (lets not complicate things with minor details like closing costs, commissions and rehab expenses - just the basic principals here). Now, when the market turns and lets say doubles your investment value (because you bought right and at the low end of the market) you can either control $200,000 in San Jacinto Real Estate or you can control $800,000 in San Jacinto Real Estate and still have had a positive cash flow every month as well as numerous tax benefits.
Fifth, any investor worth their salt will have numerous exit strategies for every project they commit to. An investor may go into a deal thinking they will generate some cash flow with a quick ‘fix and flip' but soon discover that the market has taken yet another tumble so therefore the real estate investor may have to turn their investment into a longer term rental, utilizing a ‘buy and hold' strategy.
Sixth tip is the very basic lesson everyone should know about real estate..."Location, Location and most importantly LOCATION". There are always going to be homes available in desirable areas as well as areas that no one wants to live in. There are neighborhoods where the subject home is surrounded by 20 other vacant homes - all waiting for an investor to come in and make them nice. Well, it rarely works that way. Make certain that any investment property you buy will be safe from vandalism and that once you are done with it that there will be someone willing to move in.
Investing does not have to be a ‘crap shoot'. With careful planning, lots of extremely thorough due diligence and the opinions of experts that you trust can make your investment experience both pleasurable and profitable. Regardless of what you watch on late night TV or what Internet courses you buy, real estate investing is not as easy as they make it out to be. Be diligent and the world of real estate investing can open up and change your entire life.
Blessings to all who read,
John Occhi, REALTOR®
Hemet - San Jacinto Valley
Servicing THE REO Needs of Asset Managers, Servicers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above phone number.
Serving California and Riverside County zip codes of 92501, 92503 , 92551, 92555 , 92562, 92563, 92504, 92505, 92557, 92553, 92506, 92507, 92590 92591, 92508, 92509, 92570, 92571, 92592, 92399 , 92584 , 92596, 92820 , 92571 , 92543, 92544, 92545, 92583, 92582, 92879, 92580 , 92530, 92532, 92881, 92882, 92567, 92518, 92883 , 92549, 92561, 92220, 92223, 92028, 92088