Bakersfield, Fresno or Neither?
Member since 2018 · 17 posts · 9 votes
I know its a long way out but when the High Speed Rail is finished it seems inevitable that some people will forgo the expensive LA and SF rents and move to cities like Fresno or Bakersfield (they already are).
There is also a new highway being built in Bakersfield that connects the whole west side to the 99 which goes straight to LA.
Good investment? Too far out (10-20 years)?
@Trevor Muska if a long term buy and hold strategy is your objective, I would recommend Bakersfield. Here are a few reasons why:
-Growth
Bakersfield has had a large population growth in the past 20 years, and the city itself has expanded pretty heavily to accommodate all the new growth. In the coming 20 years, Bakersfield is expected to grow to surpass the size of Fresno (including both cities growth rates).
- Development
Bakersfield is developing and re-developing some of the largest commercial projects. This will start to affect property values in a positive direction. A large commercial live, work, play development was just put into movement after 10 years of back and forth. The properties in those areas are more than likely going to increase in value in the more immediate term.
- Distance
Bakersfield is within a 4 hour drive of Most of the population of California which puts it in a very unique position to provide goods to a large population with a lower operating cost than other businesses may have. With proximity to large metros Bakersfield is a perfect location for distribution, which is only becoming larger. We already have Ross, Target, Caterpillar, and many more distribution centers popping up everywhere. Also, imagine living in a location that will allow you to visit the mountains and beaches in the same day, all within less than a 3 hour drive. When the major metros become too unreasonable, it may look like a better option.
- Resources
Kern county also produces more oil than most other locations around the country. For better or worse, that is a profitable venture still. Kern county is also going to be home to the largest solar project in California, and provides a large amount of the nations food.
- Transportation
Yes, they are building a freeway which will connect the 99 to the 5. They are also doing many other roadway projects to allow for increased traffic around the city. This shows that the city is growing at a stable pace.
And the HSR, even though at a snails pace, we are getting the HSR up and running, projections are, once that does happen it could potentially triple the size of Bakersfield's population. If you can imagine, living in a place that will buy you a literal mansion of sorts for $500,000 and only being a 45 minute train commute to work. I don't think prices will last as low as they are that much longer once the project is complete.
Sorry for rambling on, but it is a topic I love to talk about. Hope this was of some help to you, and if you would like to chat further feel free to PM me as well.
@Trevor Muska if a long term buy and hold strategy is your objective, I would recommend Bakersfield. Here are a few reasons why:
-Growth
Bakersfield has had a large population growth in the past 20 years, and the city itself has expanded pretty heavily to accommodate all the new growth. In the coming 20 years, Bakersfield is expected to grow to surpass the size of Fresno (including both cities growth rates).
- Development
Bakersfield is developing and re-developing some of the largest commercial projects. This will start to affect property values in a positive direction. A large commercial live, work, play development was just put into movement after 10 years of back and forth. The properties in those areas are more than likely going to increase in value in the more immediate term.
- Distance
Bakersfield is within a 4 hour drive of Most of the population of California which puts it in a very unique position to provide goods to a large population with a lower operating cost than other businesses may have. With proximity to large metros Bakersfield is a perfect location for distribution, which is only becoming larger. We already have Ross, Target, Caterpillar, and many more distribution centers popping up everywhere. Also, imagine living in a location that will allow you to visit the mountains and beaches in the same day, all within less than a 3 hour drive. When the major metros become too unreasonable, it may look like a better option.
- Resources
Kern county also produces more oil than most other locations around the country. For better or worse, that is a profitable venture still. Kern county is also going to be home to the largest solar project in California, and provides a large amount of the nations food.
- Transportation
Yes, they are building a freeway which will connect the 99 to the 5. They are also doing many other roadway projects to allow for increased traffic around the city. This shows that the city is growing at a stable pace.
And the HSR, even though at a snails pace, we are getting the HSR up and running, projections are, once that does happen it could potentially triple the size of Bakersfield's population. If you can imagine, living in a place that will buy you a literal mansion of sorts for $500,000 and only being a 45 minute train commute to work. I don't think prices will last as low as they are that much longer once the project is complete.
Sorry for rambling on, but it is a topic I love to talk about. Hope this was of some help to you, and if you would like to chat further feel free to PM me as well.
Sunny great infirmation. I agree great for holds. Side bar notes more jobs are becoming available to work remotely this opens up many more areas for future deveolpment.
@Sanjeev Advani , fascinating stuff! Wouldn't some of the same things be said about Fresno? I ask since I am also considering both.
Thanks!
@Nate Baum I wouldn't claim to know the Fresno market as well as I do the Bakersfield market, but here is what I see as the differences between the two:
-Growth
Between 1990 and Today Fresno's population has grown 21.61% versus Bakersfield's 51.24%
-Development
Looking at the upcoming projects in Fresno you can see hotels, and multifamily. They even have a funeral home planned, and the city's first Hyatt
Looking at upcoming development projects in Bakersfield you can see hotels, and movie theaters, Top golf, Tejon Ranch and Outlets, some of the largest commercial projects in the cities history.
This is not to say that isn't happening in Fresno, but my initial research shows that Bakersfield is starting to have more significant development projects than Fresno.
- Distance
Assuming a 2'ish' hour distance drive:
From Fresno you can reach San Jose, Palo Alto, and a lot of the Central Coast (San Jose is 1M people)
From Bakersfield you can reach LA, Orange County a large part of the populated Central Coast including Santa Barbara (Los Angeles alone is 4M people)
- Resources
Bakersfield produces more oil than Fresno, and the assumption is Bakersfield produces approximately the same as Fresno in Foods.
- Transportation
Bakersfield has closer proximity to a larger population of California than Fresno
Personally, looking at these facts I would put my money on Bakersfield. Especially with the backing of Tejon, and the fact that Silicon Valley (San Jose) is now starting to make the transition to Silicon Beach (LA).
Hope this helps
@Sanjeev Advani , you are on fire! love the passion on all things Bakersfield. The wife an I are going to have to consider it :) Where are you finding upcoming projects in Bakersfield and Fresno? Is there a go-to site?
@Nate Baum go to site meaning?
@Sanjeev Advani "go-to" i.e. where did you learn about:
"funeral home planned, and the city's first Hyatt" and "Looking at upcoming development projects in Bakersfield you can see hotels, and movie theaters, Top golf, Tejon Ranch and Outlets, some of the largest commercial projects in the cities history."
Great info about Bakersfield @Sanjeev Advani ! I know very little about Bakersfield (I'm in Fresno) but as a Realtor here, I see more and more transplants from the Bay Area moving in. It is still very affordable for California standards and it's not too far for those telecommuters to take a quick ride over back to the Bay for a meeting here or there. My personal opinion is that trend will continue, driving up our home prices here. We have a small, but growing tech community as well, so we're slowly attracting new, up and coming tech companies. With all that, I'm seeing new shopping centers pop up all the time. (The Central Valley is full of consumers ;)
I couldn't agree with you more @Sanjeev Advani. I was born and raised in Bakersfield but recently moved out to Reno, NV to work at the Gigafactory. I am just starting my Real Estate investing career and I definitely will be starting my investments in Bakersfield because I'm familiar with the neighborhoods and I have seen firsthand just how fast the city is growing. What type of properties and strategies are you currently pursuing?
@Jaime Regis right now starting to go after multi-fam value add properties, or development, but in all honesty we are just now starting to play around with the idea of developing. What type of investments are you looking at making?
@Sanjeev Advani I am also looking into multi-family properties. Development sounds like an exciting route. I'm sure after a few years of experience that is where I'll want to be. For now just trying to create some monthly cash flow to be able to focus more time on real estate investing.
@Jaime Regis @Nate Baum Hi, I'm curious if either of you invested in Bakersfield since this thread began?
My team's interest and work is in SoCal we're 2 hrs from Bakersfield and 4 from Fresno. The Pro Bakersfield folks are agents from Bakersfield (BF) and people who grew up in BF. The same fans of Fresno can be invested in Fresno. The city make ups are similar: highly dependent on public employer (govt, city works, etc) , major farm industry towns, medium salary $48K. Fresno has 80K more people and a State University which can produce more educated citizens. BF airport 1400 acres , approx 700K passengers. Fresno 2000 acres, approx 1.1 mil. passengers and expansion 2023 aims to increase to 2mill pass.
There has been conversation of rich city dwellers leaving the metro area to go further out. The LA job market although robust falls way behind San Jose/Silicon Valley salaries. Those in that NoCal market would push out far to the suburbs like Fresno...and that city also has rail and highways built and being built when we invested there in 2018. There is a group of same aged friends that live in San Jose & Los Angeles , both groups have successful people but one thing was clear: LA friends bringing in $200K have 2K sqft houses, SJ friends with $450K jobs have 1500sqft houses. In my conclusion, being in LA we would never push out to BF, not even 1/2 way to BF. I deduce that the SJ folks would push out to Fresno because their huge income would provide excellent living opportunity and money left over to fund the commute.
As investor, there is some interest about BF but after our research, we invested not in the closer BF but in Fresno.
@Drew Leo that was a great read drew, thanks. where did you buy in Fresno? i'm always interested to know what out of town folks are up to. how's it going so far?
I think, generally speaking, it depends on where you are moving FROM. The ppl in NorCal will gravitate to Fresno, SoCal to Bakersfield.
@Drew Leo Thanks for sharing. I also believe that if the leg of the bullet train connects from that area to San Jose, it will positively affect economic growth in Fresno. May never happen and a long way away at best but that could be a game changer for communities along the train route.
@Drew Leo Yes sure will. It was 2 years ago since I saw real work on 60% completed freeway with large bridges. Has anyone seen any work in the Fresno area lately/ since 2017?
@Drew Leo sorry to hear about all the turn over, that can be tough. I personally use Neighborhood Property management, they've been great for me. sometimes they choose not to manage in the area your tri-plex is in, so if that's the case you can also talk with Regency property management, they manage in a lot of lower income areas. feel free to message me if you'd like me to send you the owners numbers so you can chat with them directly. i'm also happy to help with anything fresno related anytime.
@Drew Leo- Interesting take on Fresno vs Bakersfield. I am a Realtor in Bakersfield, I was born and raised in San Jose, but cannot afford to live there! I wonder what your thoughts on are purchase vs rental in Fresno as far as the Bay Area commuters go? I'd think that those with the income you speak of would rather buy a $350k house in Fresno rather than rent? Thoughts?
Very likely for Silicon Valley high wage earners to buy, its their own personal housing. They are investing in their homes & jobs more than a vehicle to grow their portfolio. Sacramento is just a tad closer to San Jose (1.40 minute vs 1.55 drive) so that is another excellent housing alternative. I wonder what is the weekly rent for hotel/lodging for 4-5 days in SJose so to avoid commuting and just go home on weekends. This would be an excellent hack for those making $150k. Have the spouse, kids, dogs live in Established city of Sacramento or Fresno , have temp living in S Jose , save $150k+ , essentially saving time and $$$.
Fresno & Sacramento average houses are $300-400k so with 1 wage earner in a house hold of $150k that would be very doable plus the life style would be quite good. Enough $$$ left over for child care, child transport, dog walker, maid, etc.
Very likely for Silicon Valley high wage earners to buy, its their own personal housing. They are investing in their homes & jobs more than a vehicle to grow their portfolio. Sacramento is just a tad closer to San Jose (1.40 minute vs 1.55 drive) so that is another excellent housing alternative. I wonder what is the weekly rent for hotel/lodging for 4-5 days in SJose so to avoid commuting and just go home on weekends. This would be an excellent hack for those making $150k. Have the spouse, kids, dogs live in Established city of Sacramento or Fresno , have temp living in S Jose , save $150k+ , essentially saving time and $$$.
Fresno & Sacramento average houses are $300-400k so with 1 wage earner in a house hold of $150k that would be very doable plus the life style would be quite good. Enough $$$ left over for child care, child transport, dog walker, maid, etc.
I have a friend in Santa Clara who does exactly this. She has a small 2 bedroom condo, and she rents out her spare bedroom that she furnished with a Murphy bed, and advertises to commuters.
When I was managing an apartment building with mostly tiny studios, I had a woman come and look at them who actually flies back and forth on weekends to a ranch she and her husband live in in Arizona, and she works in Silicon Valley during the week. She wanted something in our price range but much nicer (basically one of the types of applicants on a beer budget looking for champagne lodgings). What? No hardwood floors? No central heat and air????? I suggested an expensive place down the road.
But, yep, people do this.