Talking to a fried of mine yesterday, he mentioned that he's moving to Modesto and bought a new house. Mainly because he can't afford to buy anywhere close to the bay area. He also mentioned that few of his co-workers are also doing the same. Looks like there's lot of new single family homes going up in Modesto. Wondering if it's a good time to buy one and may be flip or buy and hold(rent) and then sell. Anyone familiar with what's happening out there ? Is it the next destination for bay area people to buy since Tracy and Mountain house prices has gone up now.
The market in this area is still very hot....its near impossible to find an investment property around here unless you have the connections and networking to get off market properties....you will not find anything that makes $$ off the MLS unless you are solely banking on appreciation and are willing to eat the cash flow loss month after month until you sell with enough appreciation to offset those losses and the closing costs.
Stuff around here gets snapped up instantly and I'm still baffled on why..... the numbers just don't work as investments unless all you really want is loan pay down, tax benefits and are counting on appreciation.
Rental demand is high and rents continue to climb....but even with that, the prices of the houses continue to climb at a faster rate, so the #'s still just don't work.....but people are still buying like crazy..... I constantly question what I'm missing on my analysis that other people are finding appealing....
You won't make $$ buying new construction...... not as a long term buy and hold or a "flip".....
@Andy Shah - I live in Modesto. There are quite a few housing developments going in, including in my neighborhood. The NE section of Modesto is seeing the most new construction in addition to a new Save Mart shopping center at Oakdale/Sylvan. Also, in terms of ease, the Riverbank shopping center is close-by as well. It's really a nice area. Though, taxes are quite high in the Village One area. In terms of schools, the NE section of Modesto also boasts the best junior high and high schools in Modesto. The one major drawback is that is commuters will have to spend 20 minutes (minimum) just driving to a highway.
Is it a good time to buy? I'm honestly not sure. I've been searching for awhile to find a buy-and-hold and can't find anything on the MLS that would meet the 1% rule, assuming a 75% LTV. There are a few fix n' flip opportunities, though. However, not many in the NE area that I mentioned.
If there is anything more specific that you'd like to know, feel free to ask.
@Andy Shah In my opinion, appreciation has been VERY good these last few years. I purchased about 3.5 years ago and I'm up 26.7% since then. However, that's also the problem. I can't see prices continuing on that trajectory. Again, that's just my opinion.
Yes, it's easy to rent. Demand far exceeds supply. The amount of rent is extremely dependent on location. Two properties separated by a major street could mean the difference of hundreds of dollars in rent. If we're talking an average place in the NE area, you'd be assured at least $1,500/mo. Average is around $1,600. High end is likely $1,900.
The market in this area is still very hot....its near impossible to find an investment property around here unless you have the connections and networking to get off market properties....you will not find anything that makes $$ off the MLS unless you are solely banking on appreciation and are willing to eat the cash flow loss month after month until you sell with enough appreciation to offset those losses and the closing costs.
Stuff around here gets snapped up instantly and I'm still baffled on why..... the numbers just don't work as investments unless all you really want is loan pay down, tax benefits and are counting on appreciation.
Rental demand is high and rents continue to climb....but even with that, the prices of the houses continue to climb at a faster rate, so the #'s still just don't work.....but people are still buying like crazy..... I constantly question what I'm missing on my analysis that other people are finding appealing....
You won't make $$ buying new construction...... not as a long term buy and hold or a "flip".....
I completely agree with @Ned J. I too have been wondering what I'm missing that others are finding attractive. Personally, unless something wonderful falls in my lap, I'm looking out of state for my next investment opportunity.