Federal Reserve for finally raising inter- est rates. While many investors believed that this minuscule bump of 0.25 percent would not happen for at least another year, if ever, the Fed decided in late 2015 to take the plunge and finally raise inter- est rates just barely back above zero. However, if you are a San Diego investor, you can go back to behaving as if nothing happened at all, because it will likely take 12 months or longer for any substantial changes in mortgage rates to affect San Diego because of the high demand and low inventory in the area. While interest rates could potentially rise as high as 4.6 percent by the end of 2016 (we’re hovering just under 4 percent at present), rising home values should enable California buyers to con- tinue buying, selling and financing prop- erties pretty much as usual without any major roadblocks, such as substantially larger down payments or more stringent borrowing requirements. So is San Diego set to boil over? Not today, and probably not this year. How- ever, from a bird’s-eye perspective, the market is not guaranteed to be steady as the markets around it become increas- ingly tenuous. As Bryan Ellis, host of Self Directed Investor Radio and a private eq- uity fund manager, noted, “Whether the market shifts into a plateau or something more severe remains to be seen.” Investors not already involved in this area of the country will need to be light on their feet and ready for action if they want to optimize their chances of turn- ing real estate profits in the long term. •

more investors are opting to buy as low as possible, then fix up to a rental standard and rake in the monthly cash flow and long-term property ownership benefits as well. Vacancy in the city is low (2.6 per- cent) and average rents are posting at just under $2,000 a month, according to local and national surveys, so a rental portfolio in San Diego is certainly a viable, attractive option. Of course, this wouldn’t be a complete market overview without a nod to the

tively speaking, affordable to real estate investors without hundreds of millions of dollars in backing. Will you have to work a little harder to snag an off-market deal in this mar- ket than you might in some other metro areas? Certainly. But if you know your costs and are prepared to put in the time to get the property in hand, you can generate some relatively fast cash by fixing and flipping. With rental rates trending upward with no sign of stopping, more and


Carole J. VanSickle Ellis is editor and JV Manager of The Bryan Ellis Investing Letter. :: 770-542-7359

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