Remote Investing Rocks | California Does Not Easily Cash Flow

cash flow zone“Housing, growth-wise, will be the best-growing sector of the major sectors in 2013, hands down. I’m totally optimistic about housing’s recovery– there’s an inevitability that it has to go higher.” – Ken Mayland, President of ClearView Economics LLC in Pepper Pike (Source: Bloomberg)

“Where can you make the most money as a rental-housing landlord? Not California” – according to The Wall Street Journal report based on a study released by RealyTrac. The study identified 20 major areas in the country where the cash purchase cap rate yield on rental properties is more than 8%. Readers can note that many of these areas are HomeUnion Cash Flow zones. The article further reported about the general investor concern on inventory supply and institutional buyers drying up the foreclosure inventory. RealtyTrac also made an interesting observation that the individual investors are using MLS properties as the source rather than competing with institutional investors on distressed properties. California areas did not make the list due to significant rise in price with no corresponding rise in rents to make rental investments profitable.

indexThis Week’s Research

US Economy continues on the path of moderate improvement. US department of commerce reported that February exports were $1.6 billion more than January exports and trade deficit declining to $43 billion from $44.5 billion.

Corelogic reported that the home prices nation wide had an impressive gain of 10.2% in February on a month-over-month basis. This is the biggest increase since March 2006 and 12th consecutive monthly rise in home prices.

Fannie Mae reported net income of $17.2 billion indicating that the mortgage lending market is on the path to recovery.

US Construction spending in February increased by 1.2% to an $885.1 billion annual rate on a month-over-month basis. According to Bloomberg magazine’s article, housing outlays climbed 2.2%, the strongest since November 2008, and the rise is led by single-family home projects.

National Association of Realtors reported that the investment purchases of homes were at 1.21 million in 2012. This number is a slight decline compared to 1.23 million in 2011, but the number had been well below a million during down time. Vacation home sales by 10.1% to 553,000 in 2012 compared to the 2011 figure of 502,000.

Freddie Mac’s 30-year fixed-rate mortgage averaged 3.54%, and the 15-year FRM averaged 2.74%.

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