I am just starting in real estate, and trying to gauge my market. I live in Sonoma County and to be quite honest, it frustrates me how crazy expensive and competitive it is here. Being wine country and the recent fires displacing so many people, I am conflicted with wanting to help my community by investing locally but at the same time, as my first investment I don't exactly know what the smart move is here.
I plan to use some capital of my own but will need help/lenders' for the rest (I'm not sure which approach to use on this one quite yet but I'm researching as much as I can to figure it out).
I am interested in primarily multi family, buy and hold, fix & flips, BRRRR, but open to others to gain experience.
My question is: Should I invest in Sonoma County or should I invest elsewhere?
Any advice, tips, and honesty is welcome!
I am also in Slow-noma and deals can be hard to come by now a days but they are still out there. If you are comfortable with borrowing capital either from family, friends, banks, or private individuals or are flushed with $800K; then you can can land a deal here. Personally I believe it is more about getting your feet wet based on your budget. If you have any sort of a network outside of the Yeah-area, see what the market is like where they are. See who they may know there to help you build a team of agents, GCs, PMs, etc. Also, call a wholesaler (Any "I buy houses for Cash" ads you may see around) in that market and introduce yourself as a buyer and let them know what you are looking for. Once you start analyzing deals you may find some interesting ideas start to happen. Start at analyzing one a day and work up to ten of more a day. It gets quicker the more you do. Look up any area you are considering and analyze the lower priced MLS listings for practice.
But most of all..... know you first.
Do you need to be able to drive by your rental every week, day, hour???
Are you okay with just phone and texted picture updates on a rehab?
How far are you willing to drive or fly to inspect your property?
Read everything you can about REI.
Think about how it may fit with your personality and eventually, you will find a good fit.
Best of luck.
What I would also consider these days is the fact that it’s almost impossible to find any contractor in that area, never mind a decent one. There were 7000+ structures lost in the fire and there is a LOT of work to be had. I would definitely do some homework on that...
One of the things I love to do is drive around and find properties that need TLC, and picture what they might be worth with a little fixing. There are quite a few places in Sonoma County that need extra attention, but my concern is that any and all attention (resources) are going to the neighborhoods affected by the fires.
To answer your questions about "me"- I don't need to drive by the rental frequently, as long as there is a camera that can record the progress and the people (GC, REA, etc) supporting the effort are trustworthy and reliable, I am OK with being at a distance. I would fly where I need to check in on the progress at least once or twice. My main concern is finding the team of individuals that can be trusted to work with me, long-distance.
What are your thoughts on Sacramento, CA?
You bring up a very excellent point, which I've thought of as well, is that contractors would probably be very hard to come by right now or even 1-2 years from now. Not to mention getting permits approved would take a great deal of time as they are prioritizing those permits that are for homes/buildings affected by the fires.
Thank you both for your responses!
Sorry, I don't know much about the Sacramento markets.
Sacramento is a harder place to find good cashflow than out of state, but maybe better than where you are. I'm scouting for potential rentals in the Sacramento area daily, so if you'd like to talk more about exactly what suits you, I could tell you more about some of what I've been seeing.
I know this is an older post but there are still investments here in SC that work - there are several right now on the market. It all comes down to the numbers. In my experience finding contractors has not been an issue either - I keep a list of several of them. What did you end up doing?