Real estate investing in Palmdale, CA can be a profitable and relatively safe way to make your money work for you. It is pretty well common knowledge that real
estate investing requires more time, and money than most other investment options out there such as stocks and bonds. Because of this, real estate investing can and does logically have a better rate of return than other investment options. There are many differtnt ways to go about investing in real estate. Just a few off the top of my head…you could buy raw vacant land and hold it for a long period of time and wait for it to appreciate, or you could buy residential rental property and either manage it yourself or have a real estate broker manage it for you, or you could partner up with a few other real estate investors and develop commercial property.
Real estate investing in Palmdale, CA involves the purchase, ownership, management, rental and/or sale of any type of real estate for a profit. Real Estate has traditionally outperformed the Wall Street equity market for the reasons I stated above (mostly that it is not as liquid an investment and requires a larger amount of money to play the game). I have an in depth knowledge of the Palmdale real estate market so I recognize great investment opportunities when I see them. I can help you to find a great investment property better than any large institutional investment firm can because I really know the Palmdale, CA real estate market inside and out. There was a time when (during the real
estate boom) it was easy to flip houses after making minor improvements/renovations to the property. While real estate investors were holding the property and renovating it, the home was steadily increasing in value. That investment formula seems to be a thing of the past for the foreseeable future. Now it takes more work than just minor renovations to improve a property for a profit. Generally, developing a raw parcel of land still yields a good return due to the sweat equity that has been put into the property in regards to the development process being difficult. There is a lot of red tape involved in real estate development such as the permitting process. As I stated before real estate is an investment with limited liquidity relative to other investments such as stocks and bonds and , it is also requires a much larger capital outlay (although capital can be raised by loans) and requires a lot of available cash on hand during the development process. It’s important for any real estate investor/developer to understand the intense financial requirements for the process. Many Palmdale real estate development projects have failed due to the investors over simplifying the project and improper budgeting.
Residential and commercial real estate markets in many areas of the country are not organized and simple as are the markets for more liquid investments such as stocks and bonds. Real estate markets are highly specialized. Homes for example on the west side of Palmdale might see an increase in value while the east side of Palmdale might see a reduction in value at the same time. Beyond that specific areas of the east or west side such as Anaverde for example might see a fluctuation that the rest of Palmdale does not see. Locating properties for investment purposes is very labor intensive, and because of the potential for large profits, it is highly competitive. This is where I can add real value for you. As a full time Realtor in Palmdale, CA I have specific knowledge of the real-time trends and can point you, the investor toward the smart investment opportunities.
After I have located a property for you the investor that meets the criteria of your investment profile needs then starts another part of the process. Now as your Palmdale real estate agent I bring your offer (which I have helped you carefully craft) to the seller and we negotiate the terms of sale. At this point we look a little deeper into the property and make sure it didn’t seem to be too good a deal for some reason. Thorough inspections need to be done on the property such as looking for wood destroying pests such as termites, checking the plumbing to make sure it is modern with copper pipes, or you would have to replace steel pipes before long at great expense. The offer I helped you craft will almost always include contingencies for issues we find within the property. If we find that major plumbing repairs are needed for example then we can terminate the deal or work out a solution with the seller. As a Palmdale, CA real estate agent a lot of my deals fall apart in this stage so I try my best to get any concessions from the seller for you possible.
I would advise you the real estate investor to try and use as little of your own money as possible in the transaction. Leverage is the using of other peoples money in order to increase the rate of return of your own money. Most mortgage companies want to see that you the real estate investor have at least twenty percent down, or equity in the transaction. In rare situations (in my opinion) the seller of the property will offer financing to you the investor themselves, and at a lower interest rate and lower down payment requirement than traditional lending sources such as mortgage companies or banks. Most lenders see a bigger down payment on the investors part as better security for their offering you leverage. Gone are the days of the real estate boom which led to greed on part of the mortgage lenders. For a while they were giving real estate loans which required no money down. On top of this, in order to quality you just had to pass what I jokingly call the “mirror test” in which they put a mirror right under your nose and if you were breathing and could fog up the mirror, well then loan approved! This is of course what caused the collapse of our economy which began in 2007 I believe.
In a perfect world the property that we have selected for your real estate investment would pass all inspections with no marks against it, and be in satisfactory condition for our investment purposes (whether it is ready to rent out or flip to another buyer). However this is not sometimes the case and if the property is in need of extensive work to make it ready for another transaction, naturally banks would be wary to lend a decent loan to value on a property like that in fear that they (the bank) could themselves become stuck with the property and have to make the repairs or discount the property in order to get their money back out of the investment.
If you the investor are lucky enough to have all the money you need and not require any leverage it certainly simplifies the transaction. Of course this generally reduces your potential return on investment. Having all the money up front, or one hundred percent equity will allow you to buy certain properties that you could not have financed, which are sometimes the biggest money makers.
Real estate investment offers many varied benefits, and I can help you find the proper property to fit your investment needs.
Homes for Sale in Palmdale, CA by Real Estate Agent Wes Darby
Residential Listings from Lancaster, CA Realtor Wes Darb