Why are investors looking at all?

[BruinDoc]

But if investors are all buying these homes at high prices and just parking money I guess they don't care about the cash flow or that they are essentially losing money each month on an investment but hoping for appreciation?

Investors probably are diversified on many levels. Maybe some homes in the IE for cash flow, some in Irvine for appreciation. Also likely to have other investments ie. stocks, ETFs, bonds, etc. Investors arrange their baskets to hedge for changes in the economy, and also with different goals to have an overall diversified portfolio. Irvine home appreciation is probably one piece of a much larger puzzle.

 

[Bullsback]

Where should I be looking for a 4bd with a 825 budget if that is even possible? I was hoping to maybe find a home that wasn't in the best of shape for less and then may put the remainder in to it to come up to the 825 number and with low HOA and maybe no MR I was thinking older is way to go?

Keep an eye on this future new development in Portola Springs Neighborhood 4B which should be coming within the next 6-8 month.

This PS-4B will have two track, one is exactly the same as Trellis Court and other has both detach and attached units.  Since PS has always been a slightly lower demand area, builder and developer will price theses product accordingly and should be significantly lower than homes in the other villages.  That Trellis Court successor should be a lot cheaper than the Trellis Court in CVE. 

Also there will be a large public park and a new elementary school within walking distance in the future.  These two new tracks look very promising for those looking for value.  You will get a Lake Forest price but at Irvine location.

The location is further out but the area is very quite and feel very secluded.  The location might not be for everyone but take drive up there and see if the area will work for you. 

And if you are seriously interested in these, get pre-qualified by the Cal Pac's prefer lender and be on the list as soon as they open up so you have a good chance of buying one of the phase 1 homes that has the lowest asking prices.

Richmond American is building one set (on motorcourts) and the other I couldn't see who the builder was (someone probably already knows this). Was driving up there over the holiday weekend and they were working. Pools are already build out.  Looks like they are trying to open up.  These are kind of up above where Cressa and Brookfield's homes were. Some would have some nice views. 

Presume this is the same area you are referring to.  Might not be though, cause it looked like their was still room for quite a few more projects (which weren't all framed up).   

Edit: I think I'm referring to PS 5B (which is right off the toll road). 

 

[AW]

That's probably 5a you saw, Richmond has a big construction sign and the other is KB with signs on their construction bungalow, both frames are up, pool almost ready.

4b barely has anything. Land has been flattened, but not much else last time I saw.

The other 5's are even further down the road, haven't seen much activity as all the activity is focused on 5a

 

[lnc]

Where should I be looking for a 4bd with a 825 budget if that is even possible? I was hoping to maybe find a home that wasn't in the best of shape for less and then may put the remainder in to it to come up to the 825 number and with low HOA and maybe no MR I was thinking older is way to go?

Keep an eye on this future new development in Portola Springs Neighborhood 4B which should be coming within the next 6-8 month.

This PS-4B will have two track, one is exactly the same as Trellis Court and other has both detach and attached units.  Since PS has always been a slightly lower demand area, builder and developer will price theses product accordingly and should be significantly lower than homes in the other villages.  That Trellis Court successor should be a lot cheaper than the Trellis Court in CVE. 

Also there will be a large public park and a new elementary school within walking distance in the future.  These two new tracks look very promising for those looking for value.  You will get a Lake Forest price but at Irvine location.

The location is further out but the area is very quite and feel very secluded.  The location might not be for everyone but take drive up there and see if the area will work for you. 

And if you are seriously interested in these, get pre-qualified by the Cal Pac's prefer lender and be on the list as soon as they open up so you have a good chance of buying one of the phase 1 homes that has the lowest asking prices.

Richmond American is building one set (on motorcourts) and the other I couldn't see who the builder was (someone probably already knows this). Was driving up there over the holiday weekend and they were working. Pools are already build out.  Looks like they are trying to open up.  These are kind of up above where Cressa and Brookfield's homes were. Some would have some nice views. 

Presume this is the same area you are referring to.  Might not be though, cause it looked like their was still room for quite a few more projects (which weren't all framed up).   

Edit: I think I'm referring to PS 5B (which is right off the toll road). 

I was referring to PS Neighborhood 4B where California Pacific Homes are building Trellis Court and Lantana successor.

And you are indeed talking about PS neighborhood 5A where Richmond American is building Juniper, detached condo with same floor plan as Saratoga/Terrazaz, over there.

 

[Bullsback]

That's probably 5a you saw, Richmond has a big construction sign and the other is KB with signs on their construction bungalow, both frames are up, pool almost ready.

4b barely has anything. Land has been flattened, but not much else last time I saw.

The other 5's are even further down the road, haven't seen much activity as all the activity is focused on 5a

What is the KB project? Looked like a true SFR but wasn't certain if it was a Palo Alto clone or something different. 

 

[AW]

That's probably 5a you saw, Richmond has a big construction sign and the other is KB with signs on their construction bungalow, both frames are up, pool almost ready.

4b barely has anything. Land has been flattened, but not much else last time I saw.

The other 5's are even further down the road, haven't seen much activity as all the activity is focused on 5a

What is the KB project? Looked like a true SFR but wasn't certain if it was a Palo Alto clone or something different.

Elderberry? Don't like that name at all, but it's on their website
http://www.talkirvine.com/index.php/topic,14215.msg314220.html#msg314220

 

[eyephone]

That's probably 5a you saw, Richmond has a big construction sign and the other is KB with signs on their construction bungalow, both frames are up, pool almost ready.

4b barely has anything. Land has been flattened, but not much else last time I saw.

The other 5's are even further down the road, haven't seen much activity as all the activity is focused on 5a

What is the KB project? Looked like a true SFR but wasn't certain if it was a Palo Alto clone or something different.

Elderberry? Don't like that name at all, but it's on their website
http://www.talkirvine.com/index.php/topic,14215.msg314220.html#msg314220

Homes for the ______. (Fill in the blank) jk

 

[jmoney74]

Elderberry?  Comes with robot nurses?

 

[shahshah]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

 

[AW]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

With that, and want 4bd, SFR and lowest price points, it'll have to be the older parts, like el camino, Deerfield, university park areas

 

[iacrenter]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

Just follow the White Flight to South County.

 

[Burn That Belly]

x

 

[usctrojancpa]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

Just follow the White Flight to South County.

I'm white and I'm still here....maybe my memo to move to South County go lost in the mail.  haha

 

[eyephone]

Investors and home owners may have different objectives.

For example individual investors may simply sell and lock in their gains. Private equity/hedge funds investors propbably won't buy single family homes in Southern California right now as valuations are high. (They did previously)

A typical homeowner probably won't sell during a downturn. Where are they going to move to an apartment? Unless, they have family they can stay with or have another property.

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

 

[fortune11]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

Just follow the White Flight to South County.

Ha.  I think there is some truth to it although other factors also at work.  kids grown up and off to college so the parents call it a day and sell their nice Irvine SFR (most likely to an Asian buyer) and move on to San Clemente .  In the neighborhood I live in, have seen at least 4 families do that in the last few years.  Although don't know anyone who is " fleeing" Irvine with young school age kids, considering how expensive private schools are (and private schools aren't that good in OC anyways, compared to their LA or east coast counterparts).  Couple of the families did upsize to a bigger home in a different neighborhood but again, within the confines of Irvine USD.

 

[usctrojancpa]

I'll give you guys a data point, the majority of my "move-up" buyers are deciding to keep their current smaller condos/homes and renting them out versus selling them (if they don't need the downpayment from the sale of that smaller condo/home).  Since they bought years ago and their interest rates are in the low to mid 3% range, renting results in positive cash flow.  That being said, I have made them aware of the $250k/$500k gain exemption rules so they have to make a decision on what to do within 3 years of moving out. 

 

[eyephone]

So for the most part then investors and owners alike are not going to sell their properties when prices go down and financially both have a stronger balance sheet then in years past. so if they do sell they may be slim pickings anyway.

So I think this really boils down to just a few things then. Where is the best area to buy AND

1. Avoid MR
2. Low to no HOA
3. Get a reasonable size lot AND.....
4. take your kids out for HALLOWEEN and maybe actually know you neighbors.

For that combination I think increasing my budget would make sense. Any thoughts?

Just follow the White Flight to South County.

Ha.  I think there is some truth to it although other factors also at work.  kids grown up and off to college so the parents call it a day and sell their nice Irvine SFR (most likely to an Asian buyer) and move on to San Clemente .  In the neighborhood I live in, have seen at least 4 families do that in the last few years.  Although don't know anyone who is " fleeing" Irvine with young school age kids, considering how expensive private schools are (and private schools aren't that good in OC anyways, compared to their LA or east coast counterparts).  Couple of the families did upsize to a bigger home in a different neighborhood but again, within the confines of Irvine USD.

Then reality hits, that their kid can't get into an ivy school or uc. (some get accepted, but not ALL) Due to the following: competitiveness, the amount of spots taken (top 9 percent of graduating class is the target for a UC admission)

I don't mean to crush dreams. How about the other 91% of the high school students?

 

[fortune11]

I'll give you guys a data point, the majority of my "move-up" buyers are deciding to keep their current smaller condos/homes and renting them out versus selling them (if they don't need the downpayment from the sale of that smaller condo/home).  Since they bought years ago and their interest rates are in the low to mid 3% range, renting results in positive cash flow.  That being said, I have made them aware of the $250k/$500k gain exemption rules so they have to make a decision on what to do within 3 years of moving out.

That 500k exemption is partly what makes owning real estate in a good location generally a very good investment decision, notwithstanding the utility one derives from living in it.  More of a peace of mind as opposed to a owning bunch of stocks that have odds stacked against them for the most part and no one is as clever in timing the market as they like to think they are. Generally,  when people need the money from their stocks the most, it is exactly when they are marked down with paper losses waiting to be realized. 

 

[usctrojancpa]

I'll give you guys a data point, the majority of my "move-up" buyers are deciding to keep their current smaller condos/homes and renting them out versus selling them (if they don't need the downpayment from the sale of that smaller condo/home).  Since they bought years ago and their interest rates are in the low to mid 3% range, renting results in positive cash flow.  That being said, I have made them aware of the $250k/$500k gain exemption rules so they have to make a decision on what to do within 3 years of moving out.

That 500k exemption is partly what makes owning real estate in a good location generally a very good investment decision, notwithstanding the utility one derives from living in it.  More of a peace of mind as opposed to a owning bunch of stocks that have odds stacked against them for the most part and no one is as clever in timing the market as they like to think they are. Generally,  when people need the money from their stocks the most, it is exactly when they are marked down with paper losses waiting to be realized. 

Yeah, it helps having a CPA license and understanding tax rules backwards and forwards being a realtor.  Part of what I love helping clients with planning tax strategies to minimize and/or eliminate tax liabilities, that's really my best value add for clients.  But yeah, there are very few ways to get tax-free gains and selling a primary residence if you owned it for 2 out of the last 5 years and is the best one.

 

[shahshah]

I think that these local investors can't be cash flow positive on their first home if they are looking to upgrade unless they purchased the first one awhile ago to make the rental income and costs (including mortgage) line up when they move to something bigger.

I guess the trends is inventory has been declining. Nobody wants to move (prop 13 helps that as well). And if the market declines a little that won't motivate anyone either and may have the reverse effect. But salaries hit a wall and prevent the steady appreciation?

We all know that many of the irvine schools are awesome. University High/Woodbridge were my targets initially but I think the older homes (Deerfield and the Ranch) may just be the way to go so my kids are lined up for IHS (still a 10/10 school). I dreamed on Woodbridge for too long and then prices went way up. Maybe IHS is a little less competitive but the zone also includes the East Irvine homes so over time it should get all even out I guess.