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By Simon Volkov
California real estate investing is a niche that requires investors to understand changes within the market. The Golden State has been severely impacted by skyrocketing foreclosure rates since 2008. Although thousands of properties have been repossessed by lenders there is currently a low volume of properties for sale.
California real estate investing is unique in that lenders are retaining properties instead of placing them on the market. This makes it difficult for investors to locate discount-priced properties. However, with a little ingenuity and perseverance investors can locate nuggets of gold hidden in unexpected places.
Many counties in California have witnessed property values decline by over 30-percent. While this makes buying west coast property more affordable, investors should consider taking the leap now as prices are anticipated to begin rising.
Inland areas are starting to experience an upward sales projection. During the fourth quarter of 2010 home sales increased by nearly 10-percent in San Diego, San Bernardino, and LA. Investors should consider developing investment strategies now to capitalize on reduced prices, as property values are expected to increase throughout 2011.
Generating positive cash flow with California investment properties requires a thorough understanding of real estate laws. This is especially true for investors who offer homes for rent. California is renowned for its stringent landlord tenant laws.
A credible source for investors to obtain education is the California Department of Real Estate website. Investors should obtain legal counsel prior to entering into residential or commercial property leasing agreements.
According to the U.S. Census Bureau, nearly a half million people move to California each year. This provides many opportunities for investors to generate profit from investment properties. Those who take time to understand the needs of their target market can buy properties suited for specific needs.
For example, families with school-aged children prefer houses located in areas with excellent schools. Business professionals often seek out rental homes with easy access to interstate systems or airports. Entrepreneurs seek out business offices and retail stores in highly trafficked areas.
Investors that spend time reviewing market trends and comparable sales reports can more easily determine areas with anticipated growth or an abundance of low-cost properties. It is also beneficial for investors to network with realty professionals to better understand the type of properties home buyers and tenants want.
Many California real estate investors have begun offering lease purchase option agreements or seller carry back mortgages to attract buyers with bad credit. Foreclosed property owners normally cannot qualify for lending for 2 to 3 years and are forced to rent homes. Offering owner-financing grants them the opportunity to restore credit while working toward buying a house.
Owner will carry financing can also be offered to first time home buyers who do not have sufficient down payment to qualify for bank loans. Obtaining financing in California has become a challenging feat due to tightened lending criteria. Investors can offer a viable solution by offering the option to buy using creative financing options.
Investors buying properties in California shouldn’t bank on real estate as the next gold rush. However, those who take time to understand the market and buyers’ needs can generate positive cash flow until the economy turns around.
One of the best strategies for California real estate investing is to develop a solid network of professionals. The Golden State is a hotbed of activity for investment networking clubs and provides opportunities to expand investment opportunities and locate potential business associates.
About the Author: Discover more California real estate investing strategies from author and private investor, Simon Volkov. He shares extensive knowledge and resources to help investors succeed in this competitive market at SimonVolkov.com.
Source: isnare.com
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