Orange County, CA Income Properties

Monitoring the Cost & Water Usage on your Income Property

pschwier — Thu, 04 Aug 2011 20:08:18 +0000

Keeping an eye out for Excessive Water Usage in your Investment Property.

In late July of 2011 a client of ours purchased a 4 unit building in Dana Point CA. We were immediately contacted by the Water Company stating there could be a “Slab Leak” as the amount of units of water had been steadily increasing over the last several months. A unit of water as billed by the Water Company in question equates to 748.1 gallons per 1 unit of billable water. The water bill monthly for this property was going to be in excess of $500.00 per month which is extremely high for a 4 unit. Typically that price with a typical amount of tenants in a 4 unit property should run around $80.00 to $200.00 per month. Water Bills will be billed in 2 month increments so your total bill shouldn’t be exceeding more then $$200 to $400.00.

Typical Water Usage for a 4 unit should be around 1 unit of water usage per day which equates to approximately 748 gallons per day assuming 2 -3 people per unit. Factors that will alter this total water usage will be:

1. Number of Tenants in each Unit.
2. Age and model of Shower Heads in each bathroom.
3. Age and model of Toilets in each unit.
4. Age and model of Dishwasher
5. Age, size and model of Water Heater
6. Washer & Dryer Coin Operated? Or Hook Ups in Each Unit
7. Yard Maintenance

How may gallons per Shower
Assuming this has older shower heads the usage could be as much as 5-7 gallons per minute. A 10 minute shower becomes 50-70 gallons.
Not counting the time it takes to heat up the water. Should someone take a 15-20 minute shower you can see how costly this will be.
Lower Flow Faucets will put out about 2.5 to 3.5 GPM

How many gallons per Toilet Flush
Standard Flush usage today is 3.4 GPM.
However some new toilets could be as low as a gallon. Older toilets could be 7.5 gallons or more per flush.
One solution for an older toilet is to replace your toilet with a Low Flush Toilet. The other is to create a Toilet “Tummy”. You can fill up a gallon of milk with sand or place multiple bricks in the reservoir to lessen the amount of water used per flush.

How many gallons to hand wash dishes vs. a dishwasher
Average faucet flows at 2 gallons per minute. Where a typical dishwasher should use about 6-10 gallons per load.
With the water running for 10 – 15 minutes, hand washing could use as much as 30 gallons.

How many gallons per Washer Use
Typically you will use 40 to 55 Gallons per Washer Load. When purchasing a new washer be sure to find a Low Flow washer.

How many gallons used to water lawn and plants?
Based on size of hose and duration, the water usage could be as much as 300 to 900 gallons per ½ hour.

Click on the Link below to figure out how what the daily average consumption is per 1 residential Unit.
http://www.csgnetwork.com/waterusagecalc.html

Multiply your result by the number of units you have in your investment property and that will give you a good idea of what typical usage will be on your Income Property. Then call the local water company to find out what they charge per unit of water and you can back into your estimated monthly water bill.

Suggestions to lowering your Water Bill Immediately:

1. Put the exterior sprinklers and drip flow watering system on timers.
2. Swap out all of the shower heads in each unit with Low Flow Shower Heads that allow for approximately 2.5 gallons per minute of usage.
3. Swap out all faucets to be low flow faucets
4. Swap out toilets to newer Low flow Toilets. (Newer Low Flow devices may have a “GPM” on them which refers to “Gallons Per Minute”
5. Replace your Water Heater with a Tankless Water Heater
6. Replace your Washer with a Low Flow Washer

Check out these below websites for further information on Water Consumption and learning how to reduce your water bill.

General Water Usage Figures:
https://secure.wsscwater.com/home/jsp/content/water-usagechart.faces

Saving Water Website http://frugalliving.about.com/od/householdsavings/tp/Save_Money_On_Water_Bill.01.htm

10 Minute Shower Use
http://askville.amazon.com/gallons-water-average-10-minute-shower/AnswerViewer.do?requestId=2548818

Washing Machine Usage
http://wiki.answers.com/Q/How_many_gallons_does_a_washing_machine_use

Landscaping Watering Guide
http://www.wateruseitwisely.com/region/arizona/100-ways-to-conserve/outdoor-tips/water-guides/lawn-guide.html

Tankless Water Heater Review
http://www.consumerreports.org/cro/appliances/heating-cooling-and-air/water-heaters/tankless-water-heaters/overview/tankless-water-heaters-ov.htm

Questions?
Please feel free to call Patrick Schwier at 714.401.0893 regarding the Orange County Income Property Market.

Patrick Schwier
Broker/Multi-Family Investment Specialist
Web: www.schwierassociates.com
Blog: http://incomeproperties.wordpress.com/
Email: patrick@schwierassociates.com
Cell: 1.714.401.0893
Ph: 1.888.558.6487 – 1.888.55.UNITS

Looking to Purchase an Income Property? Get Pre-Approved First.

pschwier — Wed, 02 Feb 2011 19:55:56 +0000

Currently we have had an increase of client calls who are looking to purchase Income Properties from Los Angeles to San Diego. As prices have adjusted downward the ability for buyers to purchase an Apartment Complex from 2 – 50 units and see good cash flow is now a reality. With 25% down payment on a 2-4 Unit you can actually achieve cash flow in some very good rental areas. If you are looking for 5+ units typically you will be putting down a minimum of 30% or higher depending upon the Gross Rent Multiplier (Relationshiop of Total Income to the Sales Price).

One lender we work with is Terry Lee at Bank of America who specializes solely in lending for 1-4 Units. I had asked him to define the current Lending situation as of today – February 2, 2011, to better assist you as a buyer to get the best possible purchase…

Getting PRE-APPROVED with a DIRECT LENDER, (BANK), is more important than ever before. This is why;

1) Getting a loan has gotten to be a lot more complicated since the “credit crunch” hit a couple of years ago and having an experienced loan officer is ABSOLUTELY ESSENTIAL in guiding you through the process and getting your loan approved. An experienced loan officer will know how to package the loan and what the underwriters will be looking for, so the loan will get approved as quickly as possible. Often times the loan officer can make suggestions ahead of time which will allow you to qualify for a higher sales price or a smaller down payment by making some minor adjustments to your debts or down payment sources before you start the process. For instance, if you have $500 per month in credit card payments, that is about the same as about $100,000 in mortgage payment. So sometimes just paying off or restructuring a little debt can help you to qualify for a lot more. Your loan officer can often make suggestions on minor adjustments that can make all the difference in getting you what you really want in the end.

2) Serious sellers want to know that a buyer is qualified BEFORE they start negotiating. So getting a PRE-APPROVAL from a DIRECT LENDER, (a bank not a mortgage company), will show the seller you are a serious buyer who is capable of closing a real estate transaction and so deserves his or her attention.

3) If you are dealing with a bank owned property or a short sale situation, the lender making the decisions will REQUIRE that you are PRE-APPROVED or your offer will not be considered. They will want to see a solid letter from a DIRECT LENDER and usually also want to see your credit score & Proof of Funds to cover your Down Payment.

4) Last but not least, the BEST and MOST EXPERIENCED REALTORS want to know what size loan their clients can qualify for, and need specifics on sale price, down payment and any other circumstances that could affect the positive outcome of the transaction. Most Realtors think that if a buyer is not willing to take the time to get PRE-APPROVED, then they are probably not serious about buying. To make a move forward, if you are serious about making a purchase you should have started the Loan application process prior to learning the market you plan to puchase in.

Buying income properties;

1) One of the greatest advantages to buying investment property is the way you can leverage your money to get an amazing return. Let’s say you buy an investment property for $600,000 and put 25% = $150,000 down. Historically real estate has gone up in value, (over the long haul), by about 5% per year. So if your $600,000 property appreciated just 5% = $30,000, you have made a whopping 20% on your initial investment, ($30,000 divided by $150,000 initial investment = 20% return).

2) Over the long haul you should also expect to see rents go up. For example a 2 bd + 2 ba apartment in Costa Mesa rented for about $800 per month in 1998. That same apartment today would rent for approximately $1,350, or a whopping 57% increase! That not only means you are increasing your income, but you are also protecting yourself against inflation.

3) Building a retirement through buying investment property means that YOU ARE IN CONTROL of your own financial future. The value of your 401k may go up and down, your company may go out of business and there goes your pension, and who knows what will happen to Social Security since the government continues to spend more than it takes in. Getting those rent checks each month can give you some real peace of mind and keep you in control of your own destiny.

4) Somewhere around 90% of all Americans are not totally self sufficient when they reach retirement age. Buying investment properties can give you the life you want with the security of knowing you have YOUR OWN income and don’t have to count on the government, your company, or what the stock market does.

5) The industry standard when buying a 2-4 unit investment property is to put 25% down. This is the minimum down unless you are buying a single family home or condo for investment, then you can get in with 20% down, (up to a loan amount of $417,000). The down payment needs to be in your account for 60 days, (unless it is coming from your credit line).

6) In addition to the down payment and closing costs, you will also need to have some money left in reserve. The guideline is 6 months of your payment, taxes and insurance.

7) Prices have dropped a good $200,000 + across the board over the past 3-4 years, and with interest rates still at historic lows, this is a really great time to find some great CASH FLOW OPPORTUNITIES.

8) Again, you ALWAYS WANT TO BE PRE-APPROVED by a DIRECT LENDER, (BANK), so you can be in a strong position to negotiate when your Realtor finds just the right investment to meet your needs.
____________________________________________________

Should you have any questions for Terry Lee at Bank of America or myself feel free to contact Patrick Schwier at:

Analysis: 4 Unit Properties vs. Single Condo. Investments

pschwier — Fri, 14 Jan 2011 21:10:25 +0000

Recently we started working with a client who had made 1 all cash offer on a small Condominium. He was looking for what he considered to be a “Steal” of a deal. This client’s goal is to buy Short Sale or REO properties with All Cash Offers up to 1M assuming these would provide the best returns. Our client’s goal was to ascertain how good of an investment had he made in the specific condo purchase and should he look to other larger complexes for better returns?

Below, I created an analysis between 2 Currently Active 4-Unit Income Properties in Orange County and 2 Condo’s one of which he is now in escrow on.

As an investor be sure to perform a complete analysis on the properties you are considering purchasing as well do your homework on the entire market and surrounding neighborhoods to be fully prepared to make an educated offer.

Sale Price & PITI Comparison

                      Condo A         Condo B         4-Unit #1         4-Unit #2
Price            $141,900        $175,000       549,000       $749,000
Down          100%                100%                100%               100%
Loan              $0                     $0                       $0                     $0
Int. Rate    4.75%             4.75%               4.75%              4.75%
ADS*           $0                      $0                      $0                      $0
Taxes          $1,546              $1,907             $5,984            $8,164
Insurance   $300                 $300                 $1,600           $1,600

*ADS – Annual Debt Service

Income & Expenses (Based at 40% Expense)

                    Condo A         Condo B         4-Unit #1       4-Unit #2
Income          $14,400          $15,600           $63,500       $74,685
N.O.I*              $8,640             $9,360              $38,100      $44,811

*N.O.I – Net Operating Income: This amount equals Income (Rent, Laundry funds, and any other collected income) less all expenses including Taxes & Insurance. Typically Income properties run between 30% – 40% of your Total Collected Income which is called your Gross Scheduled Income. 40% is a conservative number. Many banks in reviewing Revenue numbers when processing a loan will assume 40% of the total income as the expense ratio.
In this example as the buyer is buying with 100% Down Payment hence the N.O.I will also be the same as the Annual Income as there are no loan payments to be deducted.

                            Condo A         Condo B         4-Unit #1       4-Unit #2
Ann. Profit    $8,640             $9,360              $38,100      $44,811
Mo. Profit     $720                 $780                   $3,175         $3,734

Return Analytics

                          Condo A         Condo B         4-Unit #1       4-Unit #2
Cap Rate        5.99%                5.26%             7.52%              6.48%
G.R.M             9.85                   11.22                8.65                  10.03

Location & Description

All properties would be considered C+ to B- properties. Condo Age was 20 years old as compared to the Income properties which were twice the age however they appeared to be in solid condition with a good mix.

Summary

Just because a property is a “Short Sale” or an “REO” it doesn’t necessarily mean a property is a “STEAL”. For every investment you need to be aware and calculate for all the expenses as well as possible improvements. Especially in a market where some areas are prone to higher Vacancy rates you definitely need to boost up your expense percentage of Gross Scheduled Income to assure that you are going to get the returns that you are looking for.

One more note: When buying a Short Sale or REO you are likely going to be buying the property in “As Is” condition. So if you are not completely comfortable with making improvements on a property or rehabbing units once they become vacant then make sure you locate a Qualified Property Manager to help manage your investments properly.

Analysis: 4 Unit Investment Property Cash Flow – Recently Sold 4th Qtr. 2010 in Anaheim

pschwier — Tue, 28 Dec 2010 00:54:14 +0000

THE GOAL:
TO PURCHASE AN INCOME PROPERTY IN ORANGE COUNTY
THAT CASH FLOWS!

Because prices have dropped 30%+ over the last 3 years and interest rates are at an all time low it is possible to find Investment Properties that will provide good cash flow are now SOLID LONG TERM APARTMENT PROPERTY INVESTMENTS!

Below is a sample of a 4 Unit property, a Short Sale, where we represented the BUYER which closed this quarter. The short sale process for this 4 Unit took approximately 4 months to complete.

The Investment Analysis below should help you to evaluate all of your future investments to make sure the Property you are looking at is indeed a solid investment:

2103 E. Almont in Anaheim
4 Units
Closed: 4th Qtr. 2010

Front View

Courtyard View

Garages

Investment Analysis (Actual not Pro Forma)

Sold Price                                    $590,000
Down Payment (25%)                $147,500
Loan Amount                              $442,500
Loan Type                                    30 Year Fixed @ 4.5%

P.I.T.I
Annual Debt Service (P & I)                $26,904
Monthly Debt Service                           $2,242
Anaheim Property Tax Rate              1.09%
Annual Property Taxes (1.09%)       $6,431
Insurance (Yearly)                                  $1,600

4 Unit Mix & Income (Actual)
3 BR / 1.75 BA                                         $1,550
2 BR / 1 BA                                               $1,300
1 BR / 1 BA                                               $1,000
1 BR / 1 BA                                               $975
Laundry (Leased)                                   $50
Monthly Gross Income           $4,875
Annual GSI                                        $58,500

Actual Expenses
Vacancy (3% of GSI)                          $1,755
Electric                                                     $780
Gas                                                              $1,080
Water                                                      $1,020
Gardener                                                 $600
Maintenance (5%)                               $2,837
Trash                                                         $0
Property Management                      $0
Total Expenses                           $8,072
Expense % of GSI                                13.80%

Total Operating Expenses
as % of GSI (Expenses +
Taxes + Insurance)                           27.53%
Annual Cash Flow                  $15,493
Monthly Cash Flow                $1,291

Investment Indicators based on Sold Price
Cap Rate (Actual) 7.19%
Gross Rent Multiplier (Actual) 10.09

Cost to Buyer to Purchase Property
Down payment (25%)                      $147,500
Title & Escrow Costs                        $2,422
Lender Costs including
Prepaid Insurance                            $7,680
Short Sale Fees                                   $15,775
Less Negotiation Credit                $12,500
Total Cost for buyer to
Purchase                                            $160,877

Buyer Cost as Percent of
Total Cost to Purchase Price 27%

Property Description
Building Sqft                                       3,891
Lot Size                                                 9,000
# Garage                                              4 Garage Single Spaces
Metered:
Gas:                                                       5 Meters
Electric:                                              5 Meters
Water:                                                  1 Meter

As you can see in the above evaluation with approximately 27% Down Payment on a Sales price of $590,000 this property will cash flow annually an amount of $15,493 or nearly $1,300 per month. I would consider the building and location a B- to C+ rating in the city of Anaheim. This single story set of 4 units was purchased by a couple for their first investment and they properly evaluated cash flow and weighed in location with respect to their investment needs.

Our job is to evaluate location, income & expenses and assist you in either identifying a good investment or selling your property at the right price.

Have other related questions? Call 1-888-55-UNITS.
(1-888-558-6487) or email: patrick@schwierassociates.com

Patrick Schwier
Broker/Multi-Family Investment Specialist
Web: www.schwierassociates.com
Email: patrick@schwierassociates.com
Ph: 1-888-558-6487

Short Sale: Representing the Buyer in a Multi-Family Income Property Short Sale Transaction

pschwier — Mon, 27 Dec 2010 23:08:06 +0000

Happy Holidays to everyone from Schwier & Associates!

Recently we just sold a 4 unit in Anaheim which was a Short Sale.

A Multi Unit Short Sale defined: Where a bank who has a lien on a specific income property accepts an offer from a buyer to purchase said property where the amount being offered is less than the current amount owed on the property by the current owner.

For the particular 4 Unit property just sold I represented the BUYER side of this transaction.

The property was a SHORT SALE and the Listing Agent used a Law Firm to handle the negotiations between the Seller and the Bank to complete the short sale process. The Listing Agents representative stated that they had received over 15 offers and our was accepted.

We initially made the offer on July 9, 2010 and the property closed in late November of 2010 which is pretty typical of a short sale. There was 1 outstanding lien on the property. We have attempted other short sales with as many as 4 outstanding liens (Impossible to deal with) and our recommendation is to only make an offer on a Short Sale that has a maximum of 2 liens and ideally 1 lien is best.

As a Buyer you should know specific questions to ask prior to making an offer on a Short Sale:
1. How many liens are there currently on the property?
2. What is the amount of each lien?
3. Has the seller already submitted a Short Sale Package to the Lien Holders?
4. Who are the Lien Holders? (Some Lien Holders are quicker to respond then others)
5. Are there other offers already on the property? Have they been submitted to the main lien holder? Has the Lien Holder already performed a BPO on the property?
6. Have the main lien holder and any secondary lien holders already approved the short sale?
7. Who is doing the negotiating with the Lien Holder for the short sale? An intermediary or the listing agent?
8. How many Short Sales has the current Listing Agent completed in the last 6 – 12 months?

Note: When making an offer on a Short Sale, as a buyer, you must realize that the Listing Broker will list the property below market value to encourage as many offers on the property as possible. The bank with the 1st lien will want to see multiple offers on the property. Once the highest and best offers have been identified the Listing Agent will submit up to 3 of these offers to the bank for review. The bank, in its own time, will then either accept or counter back 1 or all of the submitted offers.

Tip to the buyer: Depending upon the Listing Price & Location of your investment you could be competing against as many as 10-20 offers so you have to provide an offer that the Lien Holder and their Negotiator will evaluate as a Solid Offer with a highest chance of closing as quickly as possible. Often times you will be submitting an offer as high as 120% over initial listing price.

As a Buyer making an offer on a Short Sale you should already have:
1. Market Data: Comparable sales in the area surrounding your property.
2. Pre Approval from a lender – If you are getting a loan for the purchase be sure that you have already submitted the loan application to your bank and received a Pre Approval Letter of a specific loan amount pending appraisal of the property which assures the Lien Holder that you can perform and actually get a loan.
3. Proof of Funds
4. Credit Scores
5. Market Rents: Know the Actual Rents, (Not Pro Forma), on your investment as well as Market Rents in the neighborhood. (I suggest you do multiple drive bys in the neighborhood and call up any For Rent signs to find the current market value of the rents at that time).
6. Income/Expense Information: Any and all information that can be gathered regarding the property. Operating Statement, Previous Utility Bills, Filed Scheduele E on the property for tax purposes as well as an Actual Rent Roll.
7. PATIENCE - It could take months (as many as 12 months) to hear back from a lender… This is excessive but I am currently negotiating a Short Sale of a Condo in Oceanside that we initially began back in November of 2009. This is not the norm however and it does appear that the Short Sale process is speeding up with many banks as they have learned how to better how to handle the load of incoming Short Sales & REOs on their books.

Like any investment you have to do your homework on the property you are currently looking at investing in. Know the neighborhood, Market Rents, Rental Vacancy Ratio’s, Actual Income & Expenses. Investing in Apartments can be a great Investment however be sure to completely evaluate your investment before submitting that offer.

Have a Happy Holiday from Schwier & Associates:

Call with any questions to 1-888-55-UNITS.
(1-888-558-6487) or email: patrick@schwierassociates.com

Patrick Schwier
Broker/Investment Specialist
www.schwierassociates.com

Orange County Income Properties (2-4 Units – Averages beginning 1st Quarter 2006)

pschwier — Mon, 13 Dec 2010 22:39:59 +0000

Recently we have been getting a lot of questions regarding prices and trending information for Income Properties in Orange County. Some of the most recent questions we have heard are:

1. “Are we at the bottom of the market?”
2. “Should we be buying now?”
3. “Is it a good time to sell and trade up?”

In order to give you an idea of current values and transaction count trends I have included below a brief history of 2-4 Unit Sales and Price Averages beginning in the 1st Quarter of 2006 broken down by Major Cities in Orange County, Ca. We have chosen 2-4 unit properties for this analysis as these properties represent a true litmus test of which way the market is going and also gives you an idea of the affordability of properties now as compared to the top of the market in July of 2006.

2-4 Unit Market City: # Sold	1st Qtr – ’06	2nd Qtr – ’06	3rd Qtr – ’06	4th Qtr – ’06	1st Qtr – ’07	2nd Qtr – ’07	3rd Qtr – ’07	4th Qtr – ’07	1st Qtr – ’08	2nd Qtr – ’08	3rd Qtr – ’08	4th Qtr – ’08	1st Qtr – ’09	2nd Qtr – ’09	3rd Qtr – ’09	4th Qtr – ’09	1st Qtr – ’10	2nd Qtr – ’10	3rd Qtr – ’10
Anaheim	30	25	17	22	13	13	12	4	8	8	18	7	20	21	12	20	15	16	21
Costa Mesa	16	16	15	9	11	12	7	12	7	6	9	9	4	10	9	13	6	9	12
Dana Point	10	13	5	5	3	3	4	4	0	3	6	4	1	3	5	5	7	11	2
Fullerton	5	11	7	4	4	4	9	3	2	5	7	3	4	3	9	5	4	8	9
Garden Grove	8	6	4	3	4	2	2	2	3	3	2	9	2	6	3	7	3	6	3
Huntington Beach	16	18	12	22	10	14	11	10	8	3	14	8	3	14	12	13	7	16	9
Laguna	5	11	2	3	5	7	4	2	3	1	2	2	0	4	4	1	3	6	5
Long Beach	137	193	128	112	95	95	61	47	42	69	79	109	112	128	116	109	78	124	93
Newport Beach	7	13	10	6	6	5	4	4	2	4	8	6	2	3	7	4	5	2	12
Orange	15	22	13	14	11	11	10	5	5	7	6	13	8	13	5	8	14	13	7
San Clemente	10	10	8	11	5	11	5	6	3	8	6	8	2	6	10	9	6	8	9
Santa Ana	23	37	26	14	13	11	7	6	2	16	20	30	13	26	28	22	19	32	17
Seal Beach	2	1	2	1	0	4	3	1	2	6	1	2	1	3	1	3	1	3	1
Tustin	3	9	0	3	1	1	2	2	0	0	2	1	0	0	0	0	1	4	0
Westminster	2	7	6	3	3	2	4	1	1	3	4	4	7	3	3	6	1	2	4
Totals (2-4 Units)	289	392	255	232	184	195	145	109	88	142	184	215	179	243	224	225	170	260	204

As you can see in the Sales Numbers above, 5 of the last quarters have had over 200 sales per quarter. While this doesn’t match the sales volume at the peak in the 2nd Quarter of 2006 it does show that Sales Volumes have picked up their pace since the 1st quarter of 2008 where the number of sales was greatly diminished. If you remember that time, there was quite a bit of fear about the economy and the housing market in general which directly is reflected in the bottom line sales volume at that time.

Below I have included the sold price averages for the same time period. Remember we have included 2-4 unit sales averages for these quarterly periods and you can see an obvious drop in prices from 1st Quarter 2006 to the 3rd Quarter of 2010.

2-4 Unit Price Avg.	1st Qtr – ’06	2nd Qtr – ’06	3rd Qtr – ’06	4th Qtr – ’06	1st Qtr – ’07	2nd Qtr – ’07	3rd Qtr – ’07	4th Qtr – ’07	1st Qtr – ’08	2nd Qtr – ’08	3rd Qtr – ’08	4th Qtr – ’08	1st Qtr – ’09	2nd Qtr – ’09	3rd Qtr – ’09	4th Qtr – ’09	1st Qtr – ’10	2nd Qtr – ’10	3rd Qtr – ’10
Anaheim	$812,763	$793,760	$804,588	$827,814	$801,915	$898,153	$811,708	$834,975	$649,250	$601,651	$613,931	$541,971	$418,010	$459,233	$567,700	$484,865	$476,080	$463,813	$522,138
Costa Mesa	$1,035,355	$977,875	$945,933	$953,767	$992,068	$936,000	$951,429	$935,208	$957,650	$703,333	$670,322	$697,056	$579,000	$618,330	$735,000	$641,962	$697,500	$640,444	$678,658
Dana Point	$1,019,300	$1,134,144	$933,100	$961,200	$1,218,000	$1,092,925	$925,000	$788,500	$0	$732,333	$1,167,900	$761,750	$685,000	$778,500	$761,200	$591,000	$735,929	$743,513	$700,000
Fullerton	$775,760	$821,818	$778,129	$797,500	$676,250	$706,200	$755,000	$769,500	$775,000	$715,980	$657,429	$550,333	$477,500	$535,000	$389,167	$576,500	$515,613	$541,875	$529,667
Garden Grove	$806,875	$926,667	$734,750	$870,000	$652,225	$757,500	$1,045,000	$845,000	$725,000	$728,750	$527,500	$576,333	$615,000	$528,333	$636,000	$781,786	$670,833	$629,583	$621,333
Huntington Beach	$1,040,938	$1,254,780	$1,118,667	$1,190,136	$1,263,400	$1,207,375	$1,101,545	$996,200	$1,021,313	$1,075,206	$1,015,857	$840,375	$871,667	$876,214	$758,638	$815,538	$865,679	$862,125	$775,906
Laguna	$2,033,500	$1,972,727	$1,499,750	$2,523,333	$1,631,800	$1,761,857	$1,303,000	$4,550,000	$1,385,000	$1,535,000	$1,310,000	$975,000	$0	$2,325,000	$997,000	$1,200,000	$1,261,667	$1,146,167	$1,092,250
Long Beach	$711,387	$734,411	$714,753	$712,027	$730,745	$724,260	$713,494	$678,640	$584,236	$547,447	$420,947	$412,324	$334,180	$348,604	$394,692	$387,988	$377,621	$399,416	$413,883
Newport Beach	$2,099,821	$1,805,615	$1,541,300	$1,459,167	$1,631,800	$1,746,250	$1,751,250	$1,322,500	$1,912,500	$1,731,000	$2,101,875	$1,167,000	$2,555,000	$1,951,667	$1,319,857	$1,008,575	$840,290	$1,250,000	$1,533,250
Orange	$913,467	$811,586	$897,646	$802,071	$840,045	$741,909	$768,300	$670,998	$512,000	$565,357	$711,500	$609,777	$507,738	$468,946	$579,400	$649,313	$578,571	$562,323	$595,700
San Clemente	$1,051,900	$1,066,800	$1,122,438	$1,240,955	$1,150,800	$1,042,909	$990,000	$1,108,333	$751,667	$941,313	$1,075,000	$818,625	$552,500	$668,292	$683,300	$747,211	$753,483	$634,863	$712,667
Santa Ana	$664,943	$739,118	$711,594	$697,286	$747,077	$633,081	$683,557	$535,167	$627,450	$417,350	$441,645	$353,000	$323,138	$345,515	$326,889	$397,859	$348,037	$366,000	$379,335
Seal Beach	$1,140,000	$1,360,000	$1,387,500	$995,000	$0	$1,197,238	$1,761,667	$1,150,000	$732,500	$1,069,167	$725,000	$1,212,500	$1,125,000	$1,455,000	$870,000	$1,081,667	$620,000	$963,333	$1,278,000
Tustin	$821,333	$806,778	$0	$988,333	$1,085,000	$740,000	$676,500	$696,000	$0	$0	$660,000	$375,000	$0	$0	$0	$0	$740,000	$603,125	$0
Westminster	$762,500	$872,429	$998,000	$873,333	$796,667	$1,050,500	$716,225	$665,000	$885,000	$597,227	$703,500	$527,750	$432,500	$510,000	$493,470	$421,500	$590,000	$612,500	$432,375

Reviewing the Price Averages above you can see the average drop in price by percentage from the height of the market (2nd Qtr 2006) to the 3rd Qtr of 2010 as shown below.

2-4 Unit Market City: Avg. Price Drop	% Drop
Anaheim	36%
Costa Mesa	34%
Dana Point	31%
Fullerton	32%
Garden Grove	23%
Huntington Beach	25%
Laguna	46%
Long Beach	42%
Newport Beach	27%
Orange	35%
San Clemente	32%
Santa Ana	43%
Seal Beach	15%
Tustin	27%
Westminster	43%

Obviously price averages can be skewed a bit depending upon how many properties were sold each quarter as well as the type of property sold, whether it be an A, B or C type of investment property. Noting this if you look at the numbers as a whole they mirror the market in general…

Prices are off an average of 33% from their highs.

So what does that mean to you?

If you are looking to purchase you want to buy a property that cash flows with a reasonable amount of down payment. Learn to best leverage the amount of your down payment to maximize your return on your upcoming purchase. Don’t be caught up speculating on future value but learn to evaluate a reasonable return at the time of purchase.

If you are looking to sell your property you need to completely understand all of the comparable properties sold in the last year but more importantly in the last 3-6 months. Complete an analysis based on Location, Rental income evaluation, and nail down your expenses. As you look to sell your property evaluate what YOU would pay for your property currently in this market. What reasonable return would YOU expect from the purchase of your property.

The data used to evaluate the above information was ascertained from Local MLS data from posted sales information.

Questions? Feel free to call me at 714.401.0893 or email at patrick@schwierassociates.com

Patrick Schwier
Apartment Broker