Buying Real Estate for Profit

California Fires - How Will Real Estate Be Affected?

The fires that ravaged southern California over the past two weeks, causing several counties to be declared federal disaster areas, are now almost over. Thousands of people in the San Diego area remain evacuated from their homes, but things are getting back to normal almost everywhere and the rebuilding will soon begin. Just how will real estate investments be affected by this?

If you look back at past natural disasters, you will see that generally areas affected by floods, hurricanes, earthquakes and other catastrophies come back stronger than before. This is due in part to the influx of insurance money and government aid given to people in order to rebuild their homes and businesses. It also strengthens the economies over the next one to two years by making jobs and other construction supported industries busier than before the disaster.

Hopefully, this will be a good thing in the long run for San Diego, where foreclosures are up and property values down.

Buying Real Estate if You Are Self Employed

If you are self employed you may think that it will be more difficult for you to purchase real estate. That is not true. I have bought properties in several states over the past thirty years and have never had a problem because I am self employed. These properties have been both new construction and resale homes, and commercial as well as residential.

A larger down payment may be a good idea when you are trying to get a loan. The more "skin" you have in the game, the more favorable the lender will be in determining your rate and terms for a loan. Talk to your lender before you make an offer on a property. Having your financing in place before you make an offer will increase your negotiation power with the seller.

Make sure that your tax records and bank statements are in order before you make an offer. Also, check with the credit bureaus to make sure that the information they have is correct in your file. You don't want paperwork troubles to hold up the purchase of property.

Bishop, California - A City Not Affected By The Market

I spent last week in Bishop, California, a city of 3,000 people, located on the eastern Sierra. I was surprised to find out that the prices for single family homes in Bishop rival those in the Los Angeles area. When I inquired about this I was told that the Department of Water and Power owns all of the available land that is not part of the Indian reservation, so prices stay high because the demand exceeds the supply.

Is that all there is to it? When we run out of space to build new homes will prices go up as the population increases across the United States. I am now in the process of researching this phenomena to see if we may be on to something.

Bishop is a beautiful town with snow-capped mountains and rivers full of trout, but $300- $400/square foot of living area still seems steep to me.