Time to sell in California ?

[Kelly Pierce]

I wanted to check in with my local California folks to see how everyone’s feeling about residential investment properties in California right now. I’m feeling like it’s time to sell my two single-family residences and debating how to go about it.

I’m considering buying out of state via 1031 exchange but hearing that people are struggling to find good investments on BP. My goal is more buy & hold but I really have so much to learn as an investor.

I have considered the turnkey option but after some recent reading on here I’m wondering if there are no good buys to be found because potentially the project expenses etc are not accurate. I’m interested in learning about other investments like multi family & passive options but probably am not qualified as I’m not accredited.

Don’t want to but wondering if I need to just sell & pay the capital gains & sit for a bit in the proceeds until the market shifts a bit?

Would love to talk to some investors to toss some ideas around and also network for the future. *want to offer my fellow CA investor clients some options too for their situations.

Also is there a BP specific meet-up in the Sacramento region? I’ve joined Sacramento Wealth Builders recently and attended my first meeting.

Looking forward to connecting! Appreciate your time and consideration.

[Dave Foster]

@Kelly Pierce, "Good returns" is a relative thing. Nowhere in the country is going to have returns approaching 2014. But if you can accept the maturity of the market there are still many pockets geographically where ROI can be superior to where you're at. CA is appreciation heaven. But appreciation slows late in a market. And the flip side is that if CA is appreciation heaven then it might also be called NOI/cash flow hell. You rarely have both appreciation and cash flow together. So maybe the real question to ask yourself is "is appreciation over where I'm at". If so then looking around for better cash flow is appropriate and prudent.

A couple of thoughts - Although BP is an incredible resource don't forget it's 1.2 million people chasing the same things in pretty much the same places.  If you get off the beaten BP path you'll find gems everywhere with less competition.  Study wage, job and population growth centers and then focus your due diligence there.

You're right that turn key has lost some luster as deals are harder to find.  But not all turn key providers are created equal.  Talk to investors who have personal experience.  The best operators may have trouble finding great deals.  But they'll sacrifice volume rather than quality.

Changing geographies and sectors to take advantage of market inefficiencies is what the 1031 is all about.   Don't be scared of it.  It's very doable although it can be a little stressful once in a while :)