Re: RE Mistakes - What I’ve learned! Needs advice! - Posted by The Frisco Kid
Posted by The Frisco Kid on April 13, 2006 at 14:04:45:
First of all when you become an investor you become the center of the universe and what you think counts, if someone is selling me something everything they say and do is suspect, investigate, investigate. If anyone says a property will be worth __ dollars in __ time have them put it in writing with no disclaimers, California courts have upheld such statements and one broker I know who such a statement in front of witnesses had to payout $75k, her “puffery” defense didn’t work.
The California market hasn’t tanked yet so it looks like if you aggressively market the properties properly you may get out even money or with a manageable loss and with a lasting lesson learned so don’t even think bankruptcy. Also don’t use the realtor that was involved, find a new one and get involved in the marketing too. Maybe if you post the area this is happening in, someone may have some suggestions for you.
As for renting high priced properties in California it’s generally not a good idea, there is an old rule for my area that midpriced homes for a area will not rent for more then one-half of one percent of the market value which is a good rule to remember and the percentage of value you can get for rent will go up as you go down the price scale, and will go down as you go up the price scale. Of course always verify actual rents in the area and use the rule as a guideline. Over time you can refine the rule for your specific area.
I don’t know which tax you were told not to pay but if it is the property tax and you need that money to make a payment to the lender, then pay the property tax up to date in escrow. It takes five years for a property to get to a tax sale in California.
I will congradulate you for doing something, you just beat out 99% of the wannabee investors. Don’t let this stop you, in fact investing is the way to recoupe your losses if you suffer any, and California is a tough place to learn on the cheap, so go back to the drafting board and revise, and keep studying.