Attention California and Florida Investors; Don’t Get Cut!

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Many real estate investors that love Florida and California because of their long term prospects are licking their chops right now while looking for a great investment. While I do believe there are some good ones out there right now, my advice is to really be careful. You might be thinking “Jeremy, there is blood in the streets already! What more can happen?” To that I say “A lot!”.

Option ARMs taken in 2006 make up about $140 billion of the $350 billion of outstanding option ARMs and 45% to 50% of them are expected to default. The 2007 option ARMs, which were originated just as home prices began falling, are expected to perform badly also.

And get this, 70% of the Option Arms are concentrated in California and Florida.

While you may be able to pick up a “great deal” relative to peak values I say don’t catch a falling knife.

July 4, 2008 · Filed Under Investing

Comments

2 Responses to “Attention California and Florida Investors; Don’t Get Cut!”

  1. Johnny on July 4th, 2008 8:10 pm

    Sad, but true, great analogy. Looks like I just found a new real estate investing blog to add to my rss reader.

  2. Eric Hundin on July 4th, 2008 8:32 pm

    I found your blog on MSN Search. Nice writing. I will check back to read more.

    Eric Hundin

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