Lots of new SFRs Development in Modesto.. Is it a good buy ?

[Andy Shah]

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.

TIA

[Ned J.]

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".....