Cash Investors In Riverside County - By And Hold Strategy Will Give You The Biggest Return On Real Estate

First time Real Estate Investors are plentiful right now, but they want large and immediate returns that are unrealistic. Yesterday, I got an investor from Trulia who wanted a 15% return, immediately. Not possible, I told her. And I gave her the reasons why she could not get an immediate return like she wanted.

There are no homes that a buyer can flip and make an immediate 15% return, here is Southwest Riverside County. Unless, you buy them at a court auction.

In order to make at least $20,000, you would have to purchase a home at $200,000 and turn right around and sell it for $260,000 minimum. This is taking into consideration all expenses, commission, escrow fees.

It's just not possible to flip properties in our current market, here in Southwest Riverside County. Prices are not going up in a matter of weeks. The buy and hold strategy is the only strategy that makes sense.

Investors who use the "Buy and Hold Strategy", are the only ones buying right now.

"Don't wait to buy Real Estate, Buy Real Estate and wait, I told her.

Investors who can wait it out will benefit a great deal by buying now and waiting to sell when the market improves. Problem is most don't want to wait. There are so many great Real Estate books out that explain this theory: Here's a great book by David Schumacher.

Here's a model I gave one investor for a quick $20,000 gain. He thought it was fair but still wanted me to guarantee him this return on a property before he purchased:

Model for a quick $20,000 return:

Purchase Price $175,000

Includes all fees, escrow, transfer tax, notary – paid for by Investor* - these fees are minimal to you when using cash.

*(Title policy and commissions are paid for in initial purchase by the bank, for bank owned properties).

Costs you will incur to sell property

5% of original price you paid for improvements – $8,750.00

1.5% of sales price to new buyer for Title and Escrow Fees- $ 3,375.00 (Based on Purchase Price of $225,000)

3.5% Commissions- $7,875 (Based on Purchase Price of $225,000)

4% of Closing costs paid for FHA or VA Buyer – (Based on Purchase price of $225,000) $9000.00

Subtotal…….. $204,000

$225,000 (Sales price when you market and sell the home the home)

-$204,000- less all costs

$21,000 - profit to you

New List Price to new FHA buyer $230,000 - Let new buyer offer as little as $225,000 because everyone likes to feel they are getting a deal!

Sales price can be as low as $224,000 for you to make at least $20,000

Quick Calculation: Multiply your original purchase price by 130 percent to get the new approximate listing price required to make at least $20,000.

Since you've read this far,

Here's a great rental tool:

www.rentometer.com

This tool will tell what the most up to date rental rates are going for in the area

you are purchasing in.

Contact me for the latest information regarding Temecula Real Estate, Temecula Custom Homes, or Real Estate anywhere in Southwest Riverside County.

Jane Grant ~ DRE: 01109492
Southwest Real Estate, Inc.
Telephone: 866 621-0155

Website: www.soreal.biz
Additional Website: www.servingtemecula.com


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