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Do California REO’s Make Good Investments?

March 26, 2008

I’ve been wondering if it’s a good idea to buy some of these REO properties as investments in California. Since the market has not really seen many, if any, homes that would allow a positive cash flow in the recent past, is now a good time to invest?

The answer seems to be “yes”, and here’s why.

Since it’s more of a buyers market right now, and there are plenty of Bank Owned properties, investors have more homes to look at that would be potentially good rental properties. Why you ask? Because often these homes are left in need of repair, so there may be more leverage in negotiating price. Of course, the banks are not giving homes away, so keep that in mind when making offers.

‘Average’ homes in ‘average’ condition make better rentals than luxury homes in terms of maintenance costs. So, if you are handy, you could pick up a good property that needs some work and put a little sweat equity into it.

There are plenty of potential renters out there who have been displaced through losing their homes via short sales and foreclosures. Unfortunate, but a fact. These folks need affordable homes to live in and investors have a great opportunity for a win-win between themselves, the bank and the renter.

For all the in’s and out’s of REO Investment and all the latest on the Real Estate market in general, you can contact Cecily at 1-800-783-7175, send her an email at RealEstate@Cecily.com or please comment on this post.

Steve O’Sullivan
Technical Advisor to Cecily Tippery

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