Hello Bigger Pockets members,
My wife and I are going to find our first multi-family property to purchase later this year and are still unsure where to set our sites. We have not been pre approved yet but we will be before we start looking. We have good credit and have equity in our house so I would assume we would be pre approved for somewhere between 350k-500k. Not much for the bay area though.
We live close to Richmond and Vallejo. I see there are still some reasonable prices for multifamily in those city however that's because so much of them is pretty sketchy. My wife was suggesting we look around south Sacramento because she heard there is good growth happening there and the prices are still reasonable.
I grew up with a construction background and am pretty handy with most things being a professional woodworker so I was planning on getting a fixer upper. And if that's the case looking closer to me sure beats the driving an hour to and from for months of renovation.
Any advise with what areas around me you found worked well or seem to be priced well with signs of growth would be appreciated.
Also those with experience with the Sac area, are the prices good enough such that we can get multifamily with little renovation
It sounds like you've got a great plan. Definitely need to get preapproved first so you know what your budget is. The process of analyzing deals is a lot more challenging when you're looking at stuff you don't even know if you'll qualify for.
I can't speak about the Vallejo and Richmond markets, but I do a ton of multifamily deals in Sacramento. You'll definitely find a bulk of the better performing properties in that price range. They will be in nicer areas too.
If you look on the Police Department websites for each location, there should be a link somewhere to the site that the local PD uses to map crime statistics. Use that to determine the quality of the neighborhoods you're looking in.
What you want to pay attention to is violent crime (assault with a deadly weapon, shooting on an occupied dwelling, negligent discharge of a firearm, etc.) Those are the indicators of the more troubled areas.
Home burglaries, stolen cars, etc. happen in every neighborhood. But violent crime generally only happens in the worst.
If you decide to come to Sacramento, this map I created with all the neighborhoods and their ratings will be a HUGE shortcut for your learning curve:
Ultimately, it's going to come down to the numbers on all the properties you look at and what kind of returns they offer.
But beware looking in the worse neighborhoods... they have high cap rates and on paper they look like an amazing deal... until you find out that collecting rent is a challenge and the tenants destroy your properties so you're left with a fat renovation bill every time someone moves out.
If you have any more questions just ask and we'll help you get pointed in the right direction :-)
Thank you for your reply Wes,
yes preapproval will definitely be the first step. I appreciate the advise about checking with local police deps and destructive tenants. I will continue to look around and learn more
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