Yesterday’s post on a free foreclosure workshop spurred a lot of discussion and anger. The target: scammers who are out to make a buck by selling the public “information” on how to strike it rich via real estate investment.
Today brings the (free) beta launch of smartzip.com. The new website aims to rate individual properties on their growth and investment potential, much like Morningstar rates individual stocks. The site launched with information on just about every property in California and Florida, and plans to expand to other states later this year.
Each property receives a rating between 1 and 100, and anything scoring above 80 is considered a “5-star” investment, said CEO Tom Glassanos. In other words: chances are very, very good that you will make money in the long run by purchasing such a property.
The site tabulates each property’s score using several factors including the area’s historical home price index, demographics, and property specs. Growth scores indicate a property’s long-term appreciation, while Income scores tell prospective landlords if monthly cash flow is a possibility.
I checked out the site in search for an answer to this question: could I buy an Irvine property today and make some money as a landlord?
The answer: not very likely.
76 Lakepines
Irvine’s top-rated property is 76 Lakepines, a short sale 1-bedroom condo in the Northwood area. The property’s Growth score is 83, and its 10-year projected appreciation is 50 percent. Check out the smartzip report HERE.
So far so good…until I checked the Income score. At 74, it’s not bad, and smartzip’s analytic tools even say that this property could generate $237 in monthly cash flow. But the $290 in monthly HOA fees would cancel out that profit and then some. Still, it looks like a decent long-term investment.
For now, the company is providing all property information for free. In the long run, Growth and Income scores will be provided for free but premium content such as projected appreciation, monthly cash flow and net expected returns will be available through a subscription fee.
The company started with California and Florida “because they are considered the best areas for investment,” said CEO Tom Glassanos.
What do you think? Would you use such a site to decide whether or not to buy or invest in a property? Do you think it’s possible (or impossible) to predict future home values with any sort of accuracy? Weigh in!
What of investment do you go into *knowing* that you are going to lose money?
Do you buy a CD with a negative interest rate?
If you are *hoping* that you will make money on appreciation, it isn’t an investment, it is gambling.
Yes! ……. If you’re The Irvine Company.
The fact of the matter here is that this article brings up a very important issue that’s rarely talked about, and yet, in this recession should be addressed by the Feds immediately. That fact is that, just like when hurricanes hit the Southeast, we’re told by state government that scam artists won’t be tolerated, but NOTHING’S EVER DONE!! And in this case/economy real estate scammers are shown the same indifference by the Feds - hence NOT DOING THEIR JOB - and ultimately failing us YET AGAIN!!!
SmartZip ratings are very questionable, like the 5 star rating they gave that condo in Huntington that everyone knows is basically a glorified housing project. Just because someone sets up a website does not mean their projections are accurate or they know what’s going to happen.
Probably some places, but mine is taking a monthly loss, especially after the large rent reduction we received earlier this year.
How did you get a rent reduction? Were you threatening to walk? We scored a really reasonable rent to begin with (IMHO), so I guess demanding a reduction is out of the question…
The SmartZip idea is certainly great, but Neighborhood Scout really did much the same thing many years ago. As an investor, I find http://www.FinestExpert.com and then InvestorLoft to be better choices because they are more concerned with the investment fundamentals, such as the cash on cash return or the current price discount. Kiyosaki and many others tell us that you make your money when you BUY, not by speculating on future appreciation. After all, that is why so many CA and FL homeowners are in such bad shape right now.
stay away from that complex..its known for upstairs floods and not aging well…