California investment property isn't much different than buying residential properties in other states. The primary difference is home prices have dropped nearly 30-percent over the past two years; making California real estate enticing to investors.
The California investment market has witnessed wild swings in property values throughout the past two decades. Once notorious for some of the highest priced real estate in the world, California now offers prime investment opportunities at a fraction of original cost.
Nearly everyone knows California is one of the most popular states in which to live; boasting a population of nearly 37 million residents. From beautiful beaches to powder-packed mountains and world-class golf courses to whale watching, California offers an abundance of activities for people of all ages. Even with the high cost of living and exorbitant real estate prices, nearly 500,000 people move to California each year.
California real estate investing can be a profitable venture or financial disaster. First-time investors must become educated about the area and potential for growth before purchasing real estate in this market. Fortunately, the Internet provides a wealth of information, tools and resources which can enable investors to make smart decisions.
Investors must adhere to California real estate laws. This state is infamous for strict regulations and stiff penalties for non-compliance. If you plan to buy or sell investment properties in the state of California you would be wise to become educated about real estate laws.
According to RealtyTrac, a real estate market industry leader, California ranks number three in the top ten hardest hit foreclosure states. Their statistics claim 1 in 165 homes are affected by foreclosure. This interprets to approximately 100,000 bank owned homes available for purchase.
Foreclosure homes can be a good choice for investment purposes. However, investors must engage in due diligence prior to making a bid on foreclosed properties. When homeowners are unable to remain current on their mortgage note, they generally neglect necessary repairs and maintenance. Oftentimes, homeowners damage the house as a way to "get back" at their lender for kicking them out of their home.
Some investors engage in wholesaling California investment property. This technique is simple and has the potential to be quite profitable. Investors purchase distressed properties such as foreclosure and bank owned homes significantly under market value. They then resell the home to a buyer "as-is". Wholesalers typically earn a profit of 5- to 20-percent profit per deal.
A lesser known California investment property is that of probate real estate. Probate is the legal process used to determine the value of an estate owned by a person who has died. When decedents hold property with an outstanding mortgage balance their estate must continue making payments until probate settles.
Probate can last months or years and maintaining the real estate can quickly deplete estate funds. Probate executors can sell real estate in order to eliminate financial burdens from the estate. In most instances, probate properties are in good condition and can be purchased well under market value.
These are but a few of California investment opportunities today. There is no doubt the real estate market is undergoing massive transformation. The future is uncertain; however, throughout history real estate has always rebounded and I believe the housing market will improve in months to come.
If you're considering jumping into real estate investing do yourself a favor and learn everything you can before spending one penny. Develop a network of dependable, trustworthy colleagues including realtors, brokers, lenders and other investors. Then develop a business plan and put your strategies in action. If you take time to develop a solid plan from the start, you will be able to achieve your goals of becoming a successful real estate investor.
Why not start your education by browsing through our investment article library. We cover a wide range of topics including foreclosure, bank owned, short sale, 1031 exchanges, seller carry back mortgages and ways to finance California investment properties.