Invest 50K in CA preferably close to Bay Area

San Mateo, CA · Member since 2018 · 37 posts · 4 votes

Hi,

I wanted to buy my first rental SFH property.Want it near the bay area, preferably southern side and developed 1990 or later.

50K would be my down payments and I can go a little bit over if needed.

What are the best areas for +ve cash flow, Stockton, Tracy, Lathrop, Sacramento?

- Kamal

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Jamie Shah

Rental Property Investor · San Ramon, CA · Member since 2017 · 35 posts · 12 votes

@Kamal Sharma with a 50k down payment, it will be difficult to find a property that cash flows. At that amount you’re looking at purchasing a property in a C- neighborhood that will be difficult to manage. Every town has these areas, I would just recommend to nail down your investment strategy and goal. If your goal is cash flow, choose out of state.

An an approximate $300k property, you are looking at 75k down (25%), not to say you couldn't find products with a lower down payment requirement. But if your goal Is cash flow and investing in California and considering a 5% vacancy reserve, 5-7% repair reserve, 5-10% property management, you are not going to cash flow with a low DP. You may with a 30% down. Again, this is just assuming vanilla MLS deals.

Tracy, Lathrop, Sacramento are tough for this strategy. Maybe Stockton or Modesto might be ones you could consider. All towns have rough neighborhoods and you want to make sure you have a good RE Agent and Property Manager that you trust, that can steer you away from things you wouldn’t ideally know if you’re not local to the neighborhood.

Hope this helps.

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Jamie Shah
Rental Property Investor · San Ramon, CA · Member since 2017 · 35 posts · 12 votes
6y
@Kamal Sharma with a 50k down payment, it will be difficult to find a property that cash flows. At that amount you’re looking at purchasing a property in a C- neighborhood that will be difficult to manage. Every town has these areas, I would just recommend to nail down your investment strategy and goal. If your goal is cash flow, choose out of state.
An an approximate $300k property, you are looking at 75k down (25%), not to say you couldn't find products with a lower down payment requirement. But if your goal Is cash flow and investing in California and considering a 5% vacancy reserve, 5-7% repair reserve, 5-10% property management, you are not going to cash flow with a low DP. You may with a 30% down. Again, this is just assuming vanilla MLS deals.
Tracy, Lathrop, Sacramento are tough for this strategy. Maybe Stockton or Modesto might be ones you could consider. All towns have rough neighborhoods and you want to make sure you have a good RE Agent and Property Manager that you trust, that can steer you away from things you wouldn’t ideally know if you’re not local to the neighborhood.
Hope this helps.
2 Reply
Kamal Sharma
OP
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
6y
How about out of state such as Oregon or LV?
0 Reply
Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
6y
@Kamal Sharma I realize that you are focused on the dollar barrier to entry, but it would help if you gave more parameters on what you are seeking. For example, what types of properties are you open to purchasing? Are you planning to buy and hold or flip/1031 at a later date? Are you open to condo/townhouses with HOA's? Are you ok with the idea of no appreciation and just cash flow? Are you going to put in sweat equity? There are several more criteria that you might consider or let your audience know so that people can better help you with your goals.
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Jamie Shah
Rental Property Investor · San Ramon, CA · Member since 2017 · 35 posts · 12 votes
6y
@Kamal Sharma both Oregon and LV are good markets, just do the research and make sure you have a good team or have a turnkey provider that has a good reputation that you are buying from. Oregon, for example, similar to CA has laws that favor tenants versus LV has laws that favor the landlord. I agree with what @Arlen Chou mentioned. Focus less on the $ barrier but figure out what your goals are. Is your goal buy and hold or is your goal a 1031 or is your goal a fix/flip, not only that, but is your goal appreciation or CF? BiggerPockets has a lot of research available, similar to other CA investors looking to buy properties.
Check out Real Wealth Network (RWN) based out of the bay area and they support a number of markets across the nation. This may be something that could interest you. Good luck.
2 Reply
Gordon CuffePro Member
Investor · Roseville, CA · Member since 2009 · 1k+ posts · 584 votes
6y
@Kamal Sharmayou will not find anything built 1990 or newer where you can put 50k down or less anywhere within a 3 hour drive to you in CA. Look at home values in the kansas city area and rents and you can find something built 1990 or newer for 200k or less. If you are willing to go with a older home that has been remodeled then you can try Fresno or the Marysville, Yuba City areas.
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Kamal Sharma
OP
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
6y
@Arlen Chou, @Jamie Shah. Thanks for answering this post.
Here are some of the further details into investment:
1. Only looking at SFH. No townhomes or condos as the HOA are a bit of pain to deal with. I am currently in a condo in San Mateo, CA.
2. My main aim is to buy and hold for the next 15/20 yrs and generate equity in the house and some cashflow.
3. I am fine with gradual appreciation and generating cash flow with time, but the tenant market should be reasonable. e.g. Bay area tenants are usually pretty rock solid.
4. I want somewhat of a newer home since the property maintenance reduces and you can hold it much longer, as mentioned in (1)
75K down payment is also fine with me, as I mentioned earlier, but not willing to beyond that.
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Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
6y
@Kamal Sharma That is a VERY tall order for the Bay Area proper. You might be able to find something in secondary areas of Bay Point to Antioch, maybe in Vallejo. If you drop your 90s criteria you could also look in the Richmond and parts of deep East Oakland.
2 Reply
Kamal Sharma
OP
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
6y
@Arlen Chou, as I mentioned, I am willing to go out of state too, provided the market and renters are reasonable. Portland Oregon is one market which might be good for the future. But, don't know where to start.
0 Reply
Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
6y
@Kamal Sharma I can't comment on out of state investments because I don't do it. I see the Bay Area as a wealth-building machine that gives both appreciation and cash flow so I don't invest out of the area.
Good luck to you!
1 Reply
Kamal Sharma
OP
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
6y
@Arlen Chou, which areas do you think are worthy investing? Bakersfield, Tracy, Lathrop, Stockton or Sacramento? Thanks for all the comments and advice.
0 Reply
Arlen Chou
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
6y
@Kamal Sharma Besides driving through these cities, I don't really know any of these markets so it would be unfair of me to comment. When I research an area I spend several days, spread over several weeks and at different times of the day in those markets.
1 Reply
M.L. Dillard
Rental Property Investor - San Joaquin Valley CA. · Member since 2020 · 5 posts · 2 votes
6y
@Kamal Try looking for deals in the San Joaquin Valley area, I actually reside in the Clovis/Fresno area and the Market isn't as difficult to get into like it is in Southern CA(L.A.) and the Bay Area. But then again it does depend on what exactly your looking for. I've seen SFH for as low as 120k 3/2 but the average home price is around 200k-230k which is a couple of hundred thousands less than what it cost being in the Bay Area(Northern California). We also have Fresno State University one of the largest universities on the valley floor besides UC Merced which is about a 45min drive north of fresno.
if your going with a buy/hold strategy this area would be perfect - It took less than 24hrs to get a hit when I listed my SFH for rent actually MULTIPLE hits and 5 clients went through the screening process which took about 1week then narrowed it down to one - Now cash flowing a little above the 1% rule
0 Reply
Ramki D.
New to Real Estate · Member since 2019 · 120 posts · 26 votes
6y
@Kamal Sharma thanks for starting this thread and i am in same boat. i am exploring areas in sacramento like elk groove, citrus height, rocklin, rosevillee. etc

@M.L. Dillard- i am exploring fresno and merced (been couple of times there). between fresno vs merced, which one would you suggest. also, could you please provdie what areas should i target in fresno.

1 Reply
Daniel Schiller
Rental Property Investor · Houston, TX · Member since 2014 · 91 posts · 76 votes
6y
@Kamal Sharma go onto AliExpress and order tents in bulk. Set them up on the street and list each unit via AirBnB.
1 Reply
Daniel Schiller
Rental Property Investor · Houston, TX · Member since 2014 · 91 posts · 76 votes
6y
@Daniel Schiller not joking on this. Anyone who tells you otherwise will turnaround and sell you a $50 book as a prelude to their investment presentation.
0 Reply
M.L. Dillard
Rental Property Investor - San Joaquin Valley CA. · Member since 2020 · 5 posts · 2 votes
6y
@Ramki D. NE/NW is what I would focus on. NE Fresno has the University. SE/SW Fresno is where you could find deals but the area is a little rocky. I have a rental in NW Fresno
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Gordon Cuffe:
@Kamal Sharmayou will not find anything built 1990 or newer where you can put 50k down or less anywhere within a 3 hour drive to you in CA. Look at home values in the kansas city area and rents and you can find something built 1990 or newer for 200k or less. If you are willing to go with a older home that has been remodeled then you can try Fresno or the Marysville, Yuba City areas.
Might be able to find this in Lake county. specifically Hidden Valley lake or the Konocti Riveras. for me I would be looking at land in Jerusalem Valley that you can get a Canabis grow going legally.
Also how about Willows I kind of like that town. and maybe Williams ???

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1 Reply
Kamal Sharma
OP
San Mateo, CA · Member since 2018 · 37 posts · 4 votes
6y
@M.L. Dillard, how does this home look like, https://www.zillow.com/homedetails/3503-W-Browning-Ave-Fresno-CA-93711/18709535_zpid/
0 Reply
Jeet Sangha
Realtor · Gilroy, CA · Member since 2016 · 255 posts · 72 votes
6y
find a good deal don’t think you can’t invest in pricey market with only 50k. Money will show up if there’s a great deal!
0 Reply
Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Kamal Sharma Good luck in your search.
0 Reply
Brooke WilsonPro Member
Realtor · Bakersfield, CA · Member since 2017 · 60 posts · 17 votes
6y
@Kamal Sharma- I am a Realtor in Bakersfield, I would be happy to send you some listings. Are you interested in all at 2 houses on 1 lot, or just specifically SFH? You can pick up triplex-4plex's here for around 350-450k, and fixers for around $100k. Are you looking to Buy and Hold? Let me know if you'd be interested in receiving some leads, and if you want anything that needs some updating.
0 Reply
Sanjeev Advani
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
6y
Hi @Kamal Sharma
Glad to hear that you are looking into purchasing your first investment property. I would recommend looking at the Bakersfield area as well. Near the Bay is good, but it seems as though the cash flow and growth potential may not be as high as Bakersfield in the near future. There are many new developments planned for the area which will bring a lot of outside investment and jobs, which is a strong predictor for growth.
Please feel free to PM me to chat further if you would like.
0 Reply
Erik Grahn
San Leandro CA · Member since 2020 · 13 posts · 1 vote
6y
Originally posted by @Kamal Sharma:
@M.L. Dillard, how does this home look like, https://www.zillow.com/homedetails/3503-W-Browning-Ave-Fresno-CA-93711/18709535_zpid/

I lived in that neighborhood about 10 years ago. Not a bad area
0 Reply
Maurice Smith
Member since 2018 · 211 posts · 164 votes
6y
dont mind me asking why California ? 50k down payment in CA its possible if your not worried about cash flowing . 3% of 300k is 9k, and so on. if your looking to cash flow you will need either a real good market deal. or a larger down payment at least 20%. keep in mind opportunity cost. I would reconsider other markets with higher returns. just my personal opinion
0 Reply
M.L. Dillard
Rental Property Investor - San Joaquin Valley CA. · Member since 2020 · 5 posts · 2 votes
6y
@karmal Sharma it's a great home that resides in well established area and a great school district. If your looking for cash flow this house wouldn't be ideal unless you could get a really good deal on it. Actually I have a property that's less than 2miles away from this one and is cash flowing very well but got a really good deal on it.
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