CA High Speed Rail - Your RE move?

Question

@Manch Hon ,

I saw you mention Merced relative to high speed rail, but didn't want to take that post over.. Sounds like you're planning on retiring on that property by the time the train gets there! (if it's built on the current schedule..!) I like the idea though. Some already made some money on getting some good eminent domain prices. Not sure where the stop planning is at yet.. But if it provides a quick way to get from inland to the cities where the jobs are, it could make it a lot more feasible for people to commute in from the valley.

If I wanted to really make a play on this, I would probably buy a big swath of land that is not great for agriculture (so can get a good deal on it for it's current low utility), that would have reasonable high-speed rail access next to an established city - maybe something like Merced. This would give you a little income to pay the property taxes in the meantime, and enough space to cash out on a subdivision, big-box or mall development, etc.. when the development starts taking off a decade or so for now..

Anyone else? What's your CA high-speed rail play? What's your play Manch?

Franklin Romine · Answer

I've spent sometime studying this. I was working for a nationwide civil contracting that helped design and bid phase I.   I think eventually the rail will be completed but we will not be riding on the rail for 15+ years.  Between now and 15 years it will take an extensive amont of labor (union labor), equipment, material, small businesses and major displacement of businesses through Fresno.  The phase through Fresno is one of the most difficult stretch besides finding a way through or over the gradevine.   I have a handle full of rentals I could walk to the first phase of the construction of the rail, maybe thats good maybe its bad.

Franklin Spees · Answer

Yes, I've been following the HSR discussion and progress for years now as well.  I own a property management company with rentals near the proposed ROW; also worked at the city in the Planning Dept. for about 6 years attempting to coordinate the prospective station with the Fulton Mall specific plan, the larger General Plan, and all of the layers of transit that could link up (light rail, bus rapid transit, busses, taxis, PRT, biking, walking, etc.)  I know there is a lot of criticism about starting the HSR here in Fresno with the first run to Madera, but honestly the land acquisition and entitlement issues probably had to occur in an area that is the flattest with the least amount of urbanization in order to get it off the ground.  It could have huge impacts on cities like Fresno, Madera, Merced, and Bakersfield by linking them to LA and the Bay.  But as you said, it is going to be late 2020's before the first ticket to ride is issued and it would take some deep pockets to implement a buy and hold strategy to go after high density multi-family, conference, or hotel development.

Elizabeth Colegrove · Answer

I think it is going to open cities up. I live in hanford or side of Fresno and Visalia. Personally I think buy within these smaller central towns is also a play! With the higher access and lower cost of living and open land availability. I wouldn't be surprised to see company's move to this cheaper cost of living. Causing the prices to increase due to development.

Elizabeth Colegrove · Answer

I am an active buyer as much as I can in the Hanford area. I truly see this area having great value for long term buy and hold based on todays cash flow and long term potential :) This just makes me feel less crazy!

Franklin Romine · Answer

Anyone still following the high speed rail?

Last week they had the ground breaking ceremony in Fresno.... we should be connected to the Bay Area and Los Angeles in 20 years, can't wait to buy a ticket.  In the mean time we all should make some money.

Frank

Franklin Romine · Answer

Following up on this.  I think any venture related to this could be profiable.  Registered small business, disadvantage businesses and services, and suppliers for the people and equipment needed to build the rail.  If anyone has any thoughts or wanting to partner on an entity I wouldn't mind chatting even if you don't live in the area.

Manch Hon · Answer

I don't see a good angle to play this yet. I can't afford loading up on land. The negative cash flow will bleed me to death.

I think it's a safe assumption if development comes to Merced big time its downtown will go up in value. Do I buy multi-fam in downtown? Or lots of little houses? Commercial? How about closer to the UC campus? Which is quite far away from downtown.

We want to skate where the pug will be. But it's gonna be 2022 if no delay happened. Huge if. So we got lots of time to wait for the right opportunity. :) In general I like Central Valley's' chances. Lots of warehouses and fulfillment centers are getting built there. Amazon alone is building two. When construction jobs come back that area will be booming again.

Elizabeth Colegrove · Answer

Personally I love Central Valley to invest in. It honestly an amazing area and it is truly growing. Your taxes are 1.35%insurance is .5-% some of the lowest escrow that I have seen. This area for hit really hard so there are some great deals though they are not what they use to be. Although the houses we bought don't perfectly fit any of the rules. They are newer class a single family tenants. If this high speed train comes in and the local cities continue to reform and create areas that draw new businesses in. I really think you will see a huge boom. Especially to these smaller towns that have tons of promise.

For those in San Diego, San Franco and other expensive Southern California areas this is where I would be looking. Smaller more "isolated" areas that will open up due to the new transportation.

When one invests out of state versus their backyard they need to add the travel costs when figuring out your return. If you invest in your backyard with cheaper investing costs, this sometimes makes up/evens the playing field for an out of state higher cash flowing property.

CA High Speed Rail - Your RE move?

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