New Investment - Real Estate in CA

I have been thinking of making another real estate investment for the past year. I have been successful with condo investments in the Oklahoma City, Miami and Boston areas. My strategy has been to buy properties after a prolonged downturn in the local market. OK the Florida condo was more of a momentum play but it worked out well. I had purchased a condo in Hallandale Beach, Florida and was able to resell it a couple of weeks later for a nice profit. This was at the very peak of the real estate bubble in March 2007. I have been looking around in Florida over the past several months for a condo to purchase but I am still not sure if the current Florida market has hit bottom yet.

My brother called me about a condo in California that was a bank owned property and had recently come out of foreclosure. Comparable units in the complex are averaging $305K in price. We went in together in the purchase and were able to buy the property for $249K. The previous home owners had brought a short sale of $300K to the bank in 2009 but the bank did not want to go down that much in price. Fast forward a few years later and the bank forecloses on the property, then sells it to us for $249K in April 2011.

The property we purchased is a three bedroom condo in Rancho Mirage, CA. The condo complex is very stable and has a great rental history. Many retirees from around the US and Canada come to the area for the winter months. The complex has a 27 hole golf course that runs throughout the property along with many pools. This property has a great view of Mt. San Jacinto as well as grapefruit, orange, lemon and lime trees at the back of the property.

The property needed a few minor repairs, a refrigerator and furniture. The condo is now on the rental market and we have it rented out for 2 months already. We will break even when we rent it out for 7 months of the year. There is also a great upside potential in price appreciation as well. Here are a couple of pictures I took of the property and complex in March while on Spring Break.

We plan to hold the properly for 3 to 5 years and then sell it. We have a local rental company handling all the rentals and cleaning of the property. We will just need to pay the bills and start collecting rental checks. I already have some ideas for investing the proceeds of this condo in real estate outside the US. I just need to have the US Dollar appreciate in value over the next few years.