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DAEMANO · 11-10-2015, 04:44 PM

@Irace86

Do not buy in CA costal or large metro areas. We're talking 25%-30% inflated value from the inception of your mortgage. Buy that $600k home (that's really worth $430k) on a 30-40 year mtg and watch the value tank back to $380k when a 6.5-7.0 earthquake absolutely wrecks this investor inflated speculative market somewhere in the next 20 years. Seriously, in one of the major CA markets (norcal, socal) this is going to happen. The USGS agrees. The location is essentially a coin toss. Both SF and LA markets are desperately inflated. So the concern applies to both.

For you I'd say rent something as small and affordable as possible in CA if you're living here because you enjoy the weather, diversity, lifestyle, your family/friends, etc. Buy a second home in another market (or several) as cheap-ish investments. You can buy in guaranteed to improve areas (tourist, downtown/business, university suburbs) for next to nothing in many states where the values will ensure that they're cheap to get into and increase in equity very quickly. Rent and/use them as vacation homes when you want. Air BnB them out rest of the time. Renovate and flip them. Wash, rinse, repeat. There are so many better markets for the average investor than CA (where you need be flush with cash to get in). The days of buying a starter home in CA are gone until after the S.A. fault lets off some steam and pops this real estate bubble. Nothing else will as the money buying CA homes for cash and inflating the values is coming mostly from hedge funds and outside the country. That money will continue to come until local and state government act (as you alluded to in your second post). This is a conclusion that my line of work has lead me to. This isn't the only way to get ahead in CA. Just one way. Most importantly, recognize that Real Estate in CA is a new ballgame, and you can't bring a traditional strategy to win it.

11-10-2015, 04:44 PM	#12
DAEMANO Time Traveller Join Date: May 2013 Drives: 2013 Scion FRS - Raven Location: So Cal - Orange County Posts: 3,705 Thanks: 9,534 Thanked 3,418 Times in 1,677 Posts Mentioned: 87 Post(s)	@Irace86 Do not buy in CA costal or large metro areas. We're talking 25%-30% inflated value from the inception of your mortgage. Buy that $600k home (that's really worth $430k) on a 30-40 year mtg and watch the value tank back to $380k when a 6.5-7.0 earthquake absolutely wrecks this investor inflated speculative market somewhere in the next 20 years. Seriously, in one of the major CA markets (norcal, socal) this is going to happen. The USGS agrees. The location is essentially a coin toss. Both SF and LA markets are desperately inflated. So the concern applies to both. For you I'd say rent something as small and affordable as possible in CA if you're living here because you enjoy the weather, diversity, lifestyle, your family/friends, etc. Buy a second home in another market (or several) as cheap-ish investments. You can buy in guaranteed to improve areas (tourist, downtown/business, university suburbs) for next to nothing in many states where the values will ensure that they're cheap to get into and increase in equity very quickly. Rent and/use them as vacation homes when you want. Air BnB them out rest of the time. Renovate and flip them. Wash, rinse, repeat. There are so many better markets for the average investor than CA (where you need be flush with cash to get in). The days of buying a starter home in CA are gone until after the S.A. fault lets off some steam and pops this real estate bubble. Nothing else will as the money buying CA homes for cash and inflating the values is coming mostly from hedge funds and outside the country. That money will continue to come until local and state government act (as you alluded to in your second post). This is a conclusion that my line of work has lead me to. This isn't the only way to get ahead in CA. Just one way. Most importantly, recognize that Real Estate in CA is a new ballgame, and you can't bring a traditional strategy to win it.