2013 CALIFORNIA INVESTOR SURVEY

Survey Methodology
719 online surveys conducted in April 2013

Respondents: REALTORS who have worked with investors in
12 months prior to April 2013

Sample error: 3.5% at 95% confidence interval
REALTORS GENERAL
INVESTOR BUSINESS
Investor Market Overview
Median: 5 Investor Clients
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
1 3 5 7 9 12 15 20 22 25 28 32 45 55 100 104
Number of Investor Clients
Q: How many investor clients do you have?
Median: 3 Investor Transactions in 2012
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1 3 5 7 9 11 13 15 18 23 28 35 38 50 75 90
Number of Investor Transactions
Q: How many investor transactions did you conduct in 2012?
LAST INVESTOR
TRANSACTION
Buyers Dominate Investment Transactions
77%
23%
Buyer
Seller
Q: What type of transaction was it?
Nearly Half of Transactions Were Conducted in
Southern CA
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Another State
Northern CA
Central Valley/Other CA
Southern CA
0.5%
23.9%
26.0%
49.6%
Q: Where was the property located?
Single Family Homes Dominate Investor Market
78.0%
13.7%
7.2%
1.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Single family
home
Multifamily Other Bulk sale
Q: What type of property did your investor client purchase/sell?
67% of Sales Were Single Units, the Remainder were
(Median: 1 Unit)
0.0%
5.0%
10.0%
15.0%
23456
7
89
1
0
1
2
1
3
1
4
1
5
1
6
2
0
2
8
4
5
5
6
5
7
3
0
0
4
5
0
Number of Units
Q: How many units were purchased/sold?
Nearly Half of Transactions Listed Below $250k
0%
10%
20%
30%
40%
50%
$250 or less $251-500 $501-$1,000 $1,000+
46%
33%
14%
7%
Listing Price (In Thousands)
Q: What was the initial listing price?
Nearly Half of Transactions Sold Below $250k
0%
10%
20%
30%
40%
50%
$250 or less $251-500 $501-$1,000 $1,000+
46%
35%
13%
6%
Sale Price (In Thousands)
Q: What was the final sale price?
Median Listing Price 1% > Sale Price
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
Listing Sale
$275,000
$272,500
Cost of Doing Business is $10k or Less for Nearly Half of
Investors
6.7%
37.5%
36.1%
6.7%
11.9%
1.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
$0-1 $1-10 $10-50 $50-100 $100-1,000 $1,000+
Transaction Cost (In Thousands)
Q: How much did it cost to purchase/sell the property?
Median Transaction Cost Relative to Sale Price is
Highest in $251-500k Price Range
4.3%
5.3%
5.1%
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$250 or less $251-500 $500+
Sale Price (In Thousands)
Median Sale Price
Median Transaction Cost
Cost of Doing Business is $10k or Less for 2/3 of Buyers
30%
37%
21%
4%
8%
1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
$0-1 $1-10 $10-50 $50-100 $100-1,000 $1,000+
Transaction Cost (In Thousands)
Q: How much did it cost to purchase/sell the property?
Cost of Doing Business is $50k or Less for Majority of
Sellers
29%
15%
44%
3%
9%
1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
$0-1 $1-10 $10-50 $50-100 $100-1,000 $1,000+
Transaction Cost (In Thousands)
Q: How much did it cost to purchase/sell the property?
Median Days on Market: 15
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0-30
31-60
61-90
91-180
180-365
365+
65.5%
17.2%
4.7%
8.1%
4.1%
0.3%
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Q: How many days was the property on the market?
Buyer Median Days on Market: 15
Seller Median Days on Market: 25
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0-30
31-60
61-90
91-180
180-365
365+
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Sellers Buyers
Q: How many days was the property on the market?
Nearly Half of Sellers Owned Property Less than 1 Year
(Average: 7 Years)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
47.1%
10.0%
4.3%
2.9%
5.7%
4.3%
1.4%
11.4%
5.7%
1.4%
5.7%
Years
Q: How many months did the seller own the property?
2/3 of Investors Rented their Properties
26%
66%
8%
Flip
Rental
Other
Q: What was the intended/actual use of the property?
Sellers More Likely to Flip Properties
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All
Buyers
Sellers
26%
20%
44%
66%
73%
44%
8%
7%
12%
Other
Rental
Flip
Q: What was the intended/actual use of the property?
Most Investors Made Minor or No Repairs
17%
49%
25%
10%
None
Minor cosmetic
Major cosmetic
Major remodeling
Q: What type of rehabilitation/remodeling was done to the property?
Median Remodeling Cost: $10,000
0.0%
5.0%
10.0%
15.0%
20.0%
Remodeling Cost
Q: How much did your client invest in rehabilitating/remodeling the property?
Median Rehab Cost Ratio is Lowest in Higher Sale
Price Range
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$250 or less $251-500 $500+
4.2%
3.6%
3.4%
Sale Price (In Thousands)
Median Sale Price
Median Rehab Cost
Top 5 Reasons for Buying/Selling Now
3.9%
5.5%
9.8%
25.9%
33.7%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
location
personal
low interest rates
good price
profit potential
Q: What motivated your client to buy/sell now?
75%of Investors Own 1-10 Other Properties
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
None
1
2-5
6-10
11-20
21-50
50-100
100+
12.8%
14.5%
46.4%
14.2%
6.6%
3.1%
1.7%
0.7%
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Q: How many other investment properties does your client own?
Other Investments Primarily Located in SoCal
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Another Country
Another State
Northern CA
Other CA
Southern CA
0.3%
4.7%
21.2%
29.3%
44.4%
Q: Where are those properties located?
Most Properties Were Found on MLS
59%
22%
6%
4%
4%
3%
1%
1%
MLS
My listing
Other
Another agent's private listing
Directly from seller
Client found property
Bank
Fannie Mae
Q: How did you find the property for your client?
How Buyers & Sellers Found Properties
67%
18%
4%
4%
4%
1%
1% 1%
MLS
My listing
Other
Another agent's private
listing
Directly from seller
Client found property
Bank
Fannie Mae
31%
36%
10%
5%
6%
9%
3%
Buyers Sellers
Q: How did you find the property for your client?
Most Buyers Intend to Keep Property Less than 6 Years
(Median: 5 Years)
36.5%
38.0%
15.3%
6.6%
3.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Less than 1 1-5 6-10 11-20 21-30
Years
Q: How long does your client intend to keep the property?
2/3 of Properties are Not Professionally Managed
67%
27%
8%
Owner
Property manager
Other
Q: Who will manage the property?
FINANCING
(Buyers Only)
More than 2/3 of Buyers Paid Cash
67%
17%
7%
4%
3%
3%
2%
1%
16%
Cash
Personal Savings
Bank loan
Unsure
Proceeds from Previous
Investment
Private Investors
Other
1031 Exchange
Q: What was the source of the financing?
Q: How did your client pay for the property?
Buyers Overwhelmingly Opted for Fixed Rate Loans
0% 20% 40% 60% 80% 100%
Unsure
Adjustable
Fixed
4%
9%
87%
Q: What type of loan did your client acquire?
More than of Buyers Acquired 30-year Loans
2% 2%
4%
4%
11%
76%
3 years
5 years
Other
Unsure
15 years
30 years
Q: What is the duration of the loan?
CLIENT AGENT
RELATIONSHIP
Most REALTORS Found Clients by Referral
0% 5% 10% 15% 20% 25% 30% 35%
Client responded to my ad
He/she is a relative
For sale sign
Other
He/she is a friend
Prior dealings with my brokerage
Client found me online
Referral
2%
5%
5%
9%
13%
15%
17%
33%
Q: How did you find your client?
Most Buyers Found Property in Fewer than 8 Weeks
(Median: 4 Weeks)
%
0%
5%
10%
15%
20%
25%
30%
1-2
3-4
5-8
9-12
12+
28%
23%
23%
9%
17%
Weeks
Q: How many weeks did you spend looking for a property with your client?
Most Buyers Viewed Fewer than 10 Properties
(Median: 6 Properties)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
1-5
6-10
11-15
16-20
21-50
51-100
46.9%
25.4%
11.5%
6.2%
7.2%
2.9%
Number of Properties
Q: How many properties did you view with your client prior to the client making a purchase?
8/10 Buyers Made Offers on Other Properties
(Median: 3 Offers)
21%
14%
14%
15%
6%
8%
5%
2%
15%
0%
5%
10%
15%
20%
25%
None 1 2 3 4 5 6 7 8+
Number of Offers
Q: How many offers did your client make on other properties?
Sellers Received 4.4 Offers on Average
0%
5%
10%
15%
20%
25%
1
2
3
4
5
6+
17%
17%
23%
8%
13%
22%
Number of Offers
Q: How many offers did your client receive?
INVESTOR DEMOGRAPHICS
Most Investors are Individuals
70%
21%
3%
3%
3%
Individual
LLC
LLP
Corp
Other
Q: Was your client a(n)?
Mix of Buyer/Seller Investor Types
77%
16%
2%
2%
2%
Buyers
Individual LLC LLP Corp Other
Q: Was your client a(n)?
48%
34%
3%
8%
6%
Sellers
Majority of Individual Investors are Male
81%
19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Male Female
Q: What was the clients gender?
Average Individual Investor is 49 Years Old
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
25 or
under
26-35
36-45
46-55
56-65
65+
0.5%
11.8%
27.3%
34.2%
21.9%
4.3%
Age
Q: What was the clients age at the time the transaction closed?
of Individual Investors are Married
75%
20%
5%
Married
Single
Other
Q: What was the clients marital status at the time the transaction closed?
Most Individual Investors have Higher Education
0%
10%
20%
30%
40%
2%
2%
14%
17%
5%
35%
25%
Q: What was the highest level of education your client had completed at the time the transaction closed?
Nearly Half of Individual Investors are White
1%
6%
10%
13%
25%
47%
Black
Other
Unsure
Hispanic
Asian
White
Q: How would you describe your clients ethnic background?
Nearly Half of Individual Investors are White
6% 7%
10%
10%
10%
13%
13%
13%
25%
26%
16%
47%
44%
61%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All Buyers Sellers
White
Asian
Hispanic
Unsure
Other
Black
Q: How would you describe your clients ethnic background?
Median Annual Income/Revenue: $175k
0%
10%
20%
30%
40%
50%
14%
47%
19%
10%
7%
3%
Annual Income/Revenue (In Thousands)
Q: What is your clients annual income/revenue?
More than of Investors are Foreigners
68%
6%
3%
3%
15%
5%
USA
China
India
Mexico
Other
Unsure
Q: What is your clients country of origin?