If I were thinking of buying and holding for five years minimum, looking for a potential recovery and turn-around in the real estate market, I would look in the following areas:
- Mid- Los Angeles
The average price per foot is below current construction costs. If you ask any contractor worth their salt, they can reasonably build for about $250 a foot. Even $200 is really cheap and you’d get Home Depot or even less quality kind of finishes in the house.
Investors have been flocking to the Mid City, Inglewood, and South Central neighborhoods and flipping homes in distress. Many of these areas are now saturated with professional flippers who’se margins are being squeezed by small time investors who want to get into the game.
A good friend of mine is a professional flipper and has been quite successful at it, yet complains about the relative difficulties in finding the right deal that doesn’t have tons of risk and tons of competitors on each and every property. He’s actually considering moving to a buy and hold position for cash flow and for the inevitable housing turnaround. It’s anyone’s guess as to when that will be.
I don’t care if you are seasoned or a newbie. DO YOUR RESEARCH. This is not a market to dabble with your life savings – it has been fluctuating rapdily and right now is a unique opportunity.
If you want to discuss strategy, call me. You know where to find me. Thanks for reading.