Re: Where is everyone buying (multi-family) - Posted by DMH
Posted by DMH on September 11, 2003 at 18:59:35:
Curt, I too am in San Diego. Currently we are working on condo conversions because you are right, the prices are through the roof. $125K a door in City Heights! I bought on 44th Street 5 years ago for $30K a door! Nuts is right. The only thing these investors are banking on is appreciation, because cash flow ain’t gonna happen. Pull the demographics in East San Diego, you can’t charge $1000 bucks for a 2/1 they can’t afford it. Plus, when the market does correct itself, the service industry (which those tenants are in) suffer first. As far as Arizona goes…honestly, we had a 40 unit building at $39K a unit, with a TRUE yearly vacancy of…get this…25%! For the past 2 years, Brokers have been telling us that AZ is turing around, I don’t buy it. Inland Empire is even $100K in Riverside! Investors need to wake up and realize that when (not if…WHEN) the market does correct, these people are upside down and the reo market picks up. If I still owned property in San Diego…I’d sell for a ridiculous price, take the 15% tax hit, and sit on the sidelines and cherry pick in a year or two and buy back my property for less than i sold it for! Some decent wisdom.