All Forum Posts by: David Stuart

May I ask what indicators do you look at that shows you there's ton of development money coming in? I want to invest in a home in a city with beach city weather that also has the most potential for gains due to gentrification in the next 10 years. Right now I'm thinking that city is most likely Long Beach. But if you have ideas that other cities might be better I'm interested in your insights.

(Disclosure: I'm only beginning to think about this, so this might be a 1-2 year process don't want to mislead anyone).

Hi guys,

I'm looking to invest in a property with the following criteria:

1. It has "beach city" weather. I might have to live in this property for a few years first, and I *hate* hot weather. Looking for city where summer weather doesn't go above 80. So that includes Long Beach, San Pedro, Lomita, Seal Beach, Wilmington, Lomita, Westminster, etc.
   
2. It's a city that's relatively cheap (i.e. not Palos Verdes or Huntington Beach) but is the fastest among up-and-coming beach cities in terms of gentrification . i.e. the area is continuously getting safer and the HHI of the neighborhood is getting higher for the next 10 years.

I think based on my criteria Long Beach should be top of the list. But if there are other cities that you think also fit into this criteria I would love to know. Thanks!

tldr: I want to invest in a home in a city with beach city weather that also has the most potential for gains due to gentrification in the next 10 years.

My parents are purchasing a condo in Huntington Beach, CA. It's currently in escrow. Last week seller's inspector found mold on the second floor ceiling (crawl space). They supposedly fixed it.  Our realtor said the inspector is a trusted big company, and that we don't need our own inspector. Today, we went to the property and saw a large wet spot on the first floor carpet, about 10-15 inch diameter. It's visibly wet but we don't see leak in ceiling.

Seller has offered to bring back his inspector and maybe a plumber to find out the problem. 

My main question is: Should we alert the HOA of the mold problem?

My worry is that after we buy the property, and HOA or neighbor discover mold on their property, we will be held responsible. Is it better to bring this up now while still in escrow so seller and HOA and come to a settlement?

Are you saying the rental income expected will not cover the cost of maintenance, insurance, tax, hoa, etc? I did similar calculation and find that the margins are pretty thin (like if I had 70% occupancy rate instead of 90% it won't work). But I'm a novice so my calculations are probably not great.

Thank you @Aaron K., @Rob Moran, and @Lee L. for your very helpful insights! 

To give you a better context for my questions, here's my situation.

Resources: I have $100-$200k to invest. It's every penny I have plus some borrowed from family without interest.

Goal: Not looking to get rich quick. Just want a safe place to park this money with virtually no risk, small bit of income, and moderate possibility of increase in value of the home. Most important thing is I don't want to buy a house that might dip down in value so low that I lose most of my initial investment.

Strategy: Mainly to generate safe rental income in an area with good price-to-rent ratio, with moderately good prospect of increased housing prices. Riverside and Inland Empire seem like a good pick.

Timeline: Doing research now and might look seriously at start of 2019.

@Lee L. I have tried posting in some student forums, but haven't gotten specific responses so far. Will keep trying though! I agree SFR is preferable. I especially hate paying HOA. But my budget is only $100-200k, and would prefer not to take out a mortgage.

Here's my take on Riverside. Studies show international trade will increase steadily in the next two decades (trade war or no trade war). And Los Angeles and San Pedro harbors are the main gateways/conduits for all that increased trade. There will be more and more companies building big distribution warehouses in Riverside/SF/Redlands/Hemet. And I don't think the new jobs are all low-level labor. A lot of these are smart warehouses using robots. There will probably be a demand of skilled workers or even programmers. 

This is why I think UC Riverside is the key to the region, since companies like Amazon will want some educated technicians and will hire right out of that school. That will attract other tech companies to come invest and maybe turn UCR area into a mini tech hub.

@Lee L. thank you for your insights in the area. I can see why UCR might not be ideal. Students, I hear, are not good tenants. They come and go and are kind of destructive. 

Ideally I want to invest in a small condo/apartment that appeal to UCR support staff or teachers -- people who are there for the long term (and are guaranteed parking so they are willing to live outside of walking distance).

Your description of downtown sounds very nice! Glad to hear you are bullish on the area. I've been to Mission Inn before and it is gorgeous area!

May I ask, what do you see as the possible "downsides" of investing in Downtown Riverside (versus other parts of Riverside or SB county)? Are you ever worried that extra housing could be easily built in the surrounding spaces to devalue your property? 

I guess one way to counter that is to only invest in property that is close to some kind of amenity that is not easily duplicated by a new development -- like good freeway access, good restaurants (as you pointed out), good cultural centers, etc. 

Sorry I hope it isn't against the rules to revive a 8-month old thread. But I'm interested in investing in Riverside as well. I don't have a lot of resources (maybe just $100-200k). Was thinking of just buying a super cheap $200-250k condo around UCR and count on mostly rental income. And if value of property increase as UCR grows, even better.

Any thoughts on that idea? My fear is that there's plenty of open space around UCR and Riverside in general. So if housing demand is big enough there easily could be new instructions that will indirectly lower price of the old condo I purchase.

I saw a pre-foreclosure property in South Bay. Called the Foreclosure Trustee/Attorney and verified that it is going to auction in November.

I've found the owner's telephone number. Is it illegal for me to contact the owner? Also, this is my first time doing pre-foreclosure (or actually my first time buying a home). What can go wrong in this process? 

• Am I responsible for back HOA or property taxes?
• Is the home sold "as is"?
• Am I buying the home from the owner and resuming his mortgage? If so, do I have to qualify for that mortgage?
• Is there a "seller's remorse" rule in CA where the seller can reneg on the deal up to a certain point?
• Would a regular real estate agent be able to help me? How much would it cost? 
• If your recommendation is to hire a foreclosure expert, do you have any recommendations for South Bay area? (San Pedro)
• How much can I expect to knock off on the price?

Is there anything else I'm missing in terms of what could go wrong?

Great tips Jim! I'll try sending that address a tactful postcard. Thank you so much!