Sacramento investor looking to make first purchase

5 Replies

Hi all,

I'm currently living in Los Angeles, but grew up in Sacramento. I visit during holidays as my family still lives there. 

I'm looking to buy my first investment property in Sacramento within the next 12 months and was hoping to hear from some folks who are currently investing to get an idea of the kind of cap rates you are seeing. 

Is Oak Park still up and coming in your opinion, or is that a missed opportunity? 

Does anyone have any thoughts on Tahoe Park / Tahoe Park East? I'm thinking with the new arena and all the development happening downtown that might push prices and rents up in the adjacent neighborhoods. 

Any other neighborhoods I should be looking at? 

In addition, if there is an investor-focused agent on BP who focuses on SFR and duplex in the Sacramento area please reach out.

Thanks!

-Kyle 

Thanks, Kyle! I'll take a look. 

I think Oak Park/Tahoe Park have see just about all of the appreciation they will see for awhile and the gentrification process has been slow. I think you are 18-24 months too late.

In terms of rentals and appreciation I am not seeing anything great.

I am kicking around a rental in a new gated subdivision selling 4/2’s for under $288k. South Sacramento address but zoned for the Elk Grove school district (very coveted rental area for the schools). They are properties I could see appreciating $75k+ in the next few years. They will rent for $1850-2000. Probably $2000 considering it is brand new and gated.

Off market deal but there are 5 that will completed in the next 6 weeks.

@Joe Bertolino I recently spent some time in North Oak Park when I was visiting for Thanksgiving and given how far along in the gentrification cycle things were I was thinking I may have missed it - So I'm not surprised. I remember that area 10 years ago - What a change. 

Is the Sacramento rental market driven more by school district zoning rather than being close to downtown / Midtown? My original thesis for Sacramento was applying what I'm seeing first hand in Los Angeles (but can't afford). The rental market in LA is largely driven by millennials who want to live in the hot areas, so buying adjacent to those areas has been a good strategy for many people I know. Applying this to Sacramento, I was thinking Midtown is blowing up, so cheaper up and coming areas like Tahoe Park / Oak Park etc. would be good buy and holds. 

That being said, the cash flow characteristics of the properties you mentioned are very attractive in today's market. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.