patrick.net

If you need to ask people you don't know on Patrick.net whether to make a decision to do something, it does not matter what the something is, buying a house or crossing the road with a one-legged chicken, don't do it.

I thinks its worth to know what other people think. There are lot of smart people on this forum

prices will drop.... what looks like a low hanging fruit from far would end up being an overriped one from near.. my advice would be not to buy.

leo9 says

My question is should I buy this property or not ? Some other similar
house in same neighborhood got sold for $599k.

take 1997-98 prices add in inflation 30 to 40%
and that is what it should priced out without bubble.

the difference from your price of $599K is the exposure risk .. bubble prices.

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

Go ahead, make yourself miserable and stressed out about renters flaking out on you and then having to wait 60 days+ to evict them.
The rest of the money you lose you can just blow on women and booze.

To answer your question: NO!! Run away from that one.

thomas.wong1986 says

take 1997-98 prices add in inflation 30 to 40%

Inflation (per CPI) from 1998 to 2011 was 38.6%, and from 1997 to 2011 was 40.8%.

leo9 says

Since its a good deal, I am thinking to buy it
and rent it out. It would rent for around $2000k. If I pay 20 percent down
to buy this property and if I go with 5/1 arm then my mortgage won’t be too
high, it may be around $2500.

Why do you think it's a good deal to rent a house for below your cost? An investment property should be profitable.

Alternatively, are you willing to engage in consumption by buying a house that is rented for below your cost? How is your ability to afford both your existing rental and your mortgage payment if you don't have a tenant for 4 months? Is this property unique in some way that you would be missing out if you didn't buy it now? (e.g. it's a great lot, is an easily expandable house, etc.)

Also, have you considered low-balling on the short sale? Just because it's listed for $530K doesn't mean you should pay $530K. Those short sale prices are often completely made up. Do you know if the bank has approved a short sale at $530K?