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John Souerbry's Advice

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  • 71 Contributions
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John Souerbry wrote:

Is it safe to buy a house without a inspection?

Answer
If the seller won't let you inspect, look elsewhere.  I specialize in properties being sold by estates in probate, which by law in California are always sold "as-is."  Although they're sold as-is, the requirement to disclose problems and to allow inspections still exists.  Walk away from any property you can't inspect.Youu question is unclear, however, about whether or not the bank will not allow an inspection or will not allow an inspection contingency.  If they won't let you inspect, walk.  If they won't allow an inspection contingency, your agent should be able to use other contingencies to get out of the deal if the inspection reveals flaws you don't want to deal with.
July 21 2011
(0)

experts say:Housing prices dropped 33% since the ever peak, is this a right time to invest in RE?

Answer
It's always a good time to buy a property that is in the right location and priced correctly.  Could prices decline further?  In many areas - absolutely.  Until employment numbers improve, there will be a steady flow of bank-owned inventory coming on the market in addition to normal turnover of homes sold due to the usual reasons (upsizing, downsizing, relocation, etc.).  As long as inventory is high and lending is tight, prices will continue to decline.  However, we're already seeing prices increase in some neighborhoods where employment is up, such as parts of Silicon Valley.  All real estate - and real estate investing - is local.  Regarding interest rates, they have to go up.  They are so low now that there is almost no room for them to go down any further without giving the money away.  But keep in mind that the real estate market had good periods in the 1980's and 1990's when mortgage rates were 8% to 12% for highly qualified buyers.
July 21 2011
(0)

How are Investors finding the best deals on properties that are going to turn a profit?

Response
1.  Identify neighborhoods that have the best potential for strong value growth or rents.2.  Drive those neighborhoods and identify target properties.3.  If the property is for sale, attempt to negotiate a deal that fits investment guidelines.4.  If the property is not for sale, contact the owner to determine if they would consider a sale.5.  Repeat the above...
June 24 2011
(0)

We wants to buy $800k 4-plex and live in one of unit. We are not sure if it makes sense. Any advice?

Answer
The best bet for profiting on multi-family properties is usually through postive cash flow, not appreciation.  You can't predict what the value of the property will be when you eventually unload it, but you can predict the next year's rent with an acceptable level of accuracy.  Are you sure the cash flow will be negative?  Are you basing that assumption on current rents, or have you forecast periodic increases?  San Jose is currently one of the best rental markets in the country, with vacancy rates city-wide under 3%.  I'm even able to rent our haunted house on Fox Avenue downtown...  If you have the income to cover the loss from your day job, and since you intend to occupy one of the units, this investment might be able to work for you regardless of current cash flow.  But you should see if you can improve the cash flow as soon as possible.
May 30 2011
(0)

Is it smarter to buy than Rent?

Response
SteadyState - thanks for your kind comments.  As an MBA with 20 years experience in corporate planning and 10 years experience in  real estate investment planning, I'm uniquely qualified to help investors plot out investment strategys and budgets.  But when it comes to family financial plans, saving for college, and retirement planning - I'm a zero.  Our clients need a qualified assessment of their buying power based on their complete financial picture - which is right up a certified financial planner's alley.Best of luck.
May 08 2011
(2)

Is it smarter to buy than Rent?

Response
No real estate agent is qualified to answer this question.  Every person's situation is different, only a qualified financial planner can advise someone if it's better to rent or buy based upon their income, savings, employment, tax issues, and other financial commitments.  Agents who advise anyone to buy without first seeing a financial planner are not working in the best interest of their client.
May 07 2011
(6)

Is it a good time to rent out my current home and buy another in a better school district

Answer
Yes, there are deals to be found on the peninsula, even in the locations with better schools.  And rents are getting better in many of the east bay neighborhoods, so you could probably make a few dollars of income from your current home if you have equity.  But you should probably speak with a financial planner before you talk to an agent.  No agent can say if this is a good move for you, only a financial planner who has studied your entire family financial plan is qualified to say whether this would work for your specific situation.  I recommend you start there.
May 07 2011
(0)

Refinance or buy a second home?

Answer
Best advice I ever heard from a very successful and seasoned investor: "never, ever, under any circumstances do a cash-out refinance, not on your home, not on your investments."  The market conditions of the past 5 years have proven this to be good advice.Before you talk to a lender and go further into debt, talk to a financial planner about your complete financial plan.  It may be wiser for you to rent a 2nd home at this point rather than going further into debt on another home. Only a qualified financial planner can advise you on this, certainly not a lender or an agent.Best of luck and thank you for your service.
May 07 2011
(0)

What are the pros and cons to paying cash vs getting a loan for an investment property?

Answer
Pay cash and enjoy the monthly cash flow.  Some will say you need the mortgage interest write-off, but that's absolutely not true.  Money paid towards interest is money down the drain.  Better to invest in improvements to the property you bought, thus raising its value, rather than throwing money away on interest.  Done correctly on your taxes, both mortgage interest and improvements are equally deductible - but only improvements provide a return on investment.Don't take my word for it - talk to your tax pro.
May 07 2011
(2)

Should I buy some land or property?

Answer
Before you talk with an agent, talk to a financial advisor.  Figure out if real estate, whether a home or land, is right for your overall financial plan.  No agent can answer that question.If real estate is a good idea for you, consider how you will make money from the investment.  Do you want income or appreciation, or both?  Rental homes provide both, land provides only appreciation.
May 07 2011
(0)