Buy an investment property? (Sacramento, Oakland: real estate, rental, broker)

[ssh123]

I was wondering what areas of Sacramento would be great to buy a house for investment purposes. Basically, looking at an area which will rent out easily.
Any inputs are appreciated.

[clongirl]

I believe that ship has sailed... Have you read or understand what's happening with the housing market in California?

[Ultrarunner]

Originally Posted by ssh123

I was wondering what areas of Sacramento would be great to buy a house for investment purposes. Basically, looking at an area which will rent out easily.
Any inputs are appreciated.

I would say just about any area where you can buy property and have the rent cover your costs.

I started buying investment property in a very similar market back in 82-83...

Do you homework and be realistic. The only ways I know to make money with Investment Property is to Build it or from Rental Income and/or Appreciation and I never count on Appreciation.

Traditionally, it is much easy to generate positive cash flow and higher Return on Investment when dealing in multi-unit property... the economy of scale is in your favor.

[DMenscha]

Originally Posted by clongirl

I believe that ship has sailed... Have you read or understand what's happening with the housing market in California?

By all means, as an investor, you wouldn't want to buy in a depressed market, wait until things are booming again before you put your money in.

[ssh123]

Thanks all.

DMenscha,
Isn't this the right time to buy since the rates have fallen ? Once the market starts picking up, the rates and the property prices go up. Or do I have t all wrong?

Ultrarunner, since you entered this business long back, what does your experience say? Is this the right time or should i wait another six months to see which way the market goes? Also, is a multi unit a better investment than a Single family?

[clongirl]

Yeah, sorry about that folks. Always refer to a real estate agent for good sound advice on buying investment property.

[Ultrarunner]

Originally Posted by ssh123

Thanks all.

DMenscha,
Isn't this the right time to buy since the rates have fallen ? Once the market starts picking up, the rates and the property prices go up. Or do I have t all wrong?

Ultrarunner, since you entered this business long back, what does your experience say? Is this the right time or should i wait another six months to see which way the market goes? Also, is a multi unit a better investment than a Single family?

I have a contrarian philosophy that has served my well over the last 25 years when it comes to Bay Area Real Estate.

My best buys, except one, were made in down markets where there are many willing sellers and buyers are scarce. My advice is to study your market and run the numbers until you find something that works for you.

I've bought when interest rates were 12% and higher by having the seller carry-back the First Deed of Trust... I also made good purchases after the Loma Prieta Earthquake and Oakland Firestorm... all times when some owners desperately wanted out.

Don't be afraid to make offers for what a property is worth to YOU. I've made a lot more offers than purchases because I'm conservative and the last thing I want is a case of buyer's remorse. Remember... YOU are the one that has to live with your property and make it work.

I worked with several super agents/brokers in the 80's and 90's... and they would call me when they had something they thought I would like.

I have always written by own offers and had the Broker do the presentation... this way I always knew exactly my obligations and time line.

An owner occupied 3-plex of 4-plex is one of the safest ways to get into the market if you have what it takes. Remember, the cost per unit drops dramatically as the number of units increase.

[DMenscha]

Ultrarunner is dead on in his advice, and he seems to have practiced what he preaches. The only thing I would add to his advice is about multi-family units. The cost per unit decreases, but the headaches per unit increase

Interest rates aren't that much different in the past 2 years ranging from 5.375% to 6.375%. My latest rate sheet from today shows a 6% non-owner rate, shop your local brokers to get better information.

I'm sorry I can't give you a better read in the Sacramento market, but my understanding is there are some tremendous opportunities to be had.

Good luck

[ssh123]

Thanks for all your inputs.I spoke with a few brokers and they suggested other alternate areas as well like Antioch, Brentwood.
What is your take on that?

[DMenscha]

The closer you get to the bay area, the more you're likely to pay for an equivalent home. There's probably a sweet spot for the cost/rental income number, where that is will take a lot of research.