Tuesday, June 23, 2009

Biden says California is Prime Target for High Speed Rail Project

Although California is in a budget crisis, Vice President Joe Biden said that the state's high-speed rail project is well positioned to compete for a large share of the $8 billion that the Obama administration set aside in the American Recovery and Reinvestment Act for rail lines.

The planned high-speed rail system would commute passengers between Los Angeles and San Francisco in 2 hours and 40 minutes. The train would stop in Palmdale, Ca as a major stop, and it would be a major boost for the local economy, making access to the Antelope Valley even easier. California voters approved $9 billion in bonds for the project in the recent November election. The state hopes federal funding and the private sector will complete the expected $34 billion estimated budget, which is only the first phase, which would connect San Francisco to Anaheim. The second phase would further connect a total 800 miles from Sacramento to San Diego traveling primarily down the center of the State via Fresno and Bakersfield. Construction between Anaheim and San Francisco would take at least a decade, according to planners.

Reports indicate that the portion that initially applies to the Recovery Act criteria for high-speed rail would be the rail line between San Francisco to San Jose and Los Angeles to Anaheim. The administration is looking for “shovel ready” opportunities which entail having contracts awarded by 2012 and work completed by 2017.

The potential real estate impact for the Antelope Valley is years away, but it bodes well for towns just outside of major metropolitan areas. There will be vacant land opportunities up and down the State, and this is another example for buying land within the path of growth, and getting there before development creates the greatest percentage of growth. We will see how this all transpires, but the focus of California and the current administration is mass transit and near term employment opportunities.

Tuesday, June 2, 2009

The Auction Option

There are a number of ways to buy land, and sell land at a good price range. The MLS (multiple listing services) is the most common means via a broker. A broker can guide the buyer and seller through the process. A new more risky means is buying via an auction. There are many private auctions and county auctions where land is sold. We have found in both private and public auctions the selling prices can be favorable and unfavorable. A buyer needs to be well informed regarding land before potentially losing capital in a bad purchase.

Several years ago during market highs we witnessed a County auction where prices raised twenty to fifty percent above retail. Buyers were overbidding land for greater prices then they could have negotiated from the local MLS. These auctions can create a price frenzy to buy a property that a purchaser feels is the best property on the list. The reality is there are many decent properties available at auctions if you have performed your due diligence. A buyer should have a specific maximum price range and stick to it. We have also found where auctions list parcels which are street easements, ally's, mountain sides, and flood zones. An uninformed buyer will overbid and they are left holding a useless property in many cases.

The professional auction bidders have aerial maps, plat maps, real estate software, and historical information on properties and have viewed the property. The professional investor has typically "walked the property", so they know what they are investing in.

Beware the auction option, since you should know what you are investing in. In many cases you can hire a professional to buy for you at the auction. You pay a small commission and they can do the research and bid for you in you name. You could own a well priced investment, or own an unsellable piece of land. Buyers beware the auction.