Good Multi-Family Markets

24 Replies

Hey BPers, I'm looking to find a good market for 2-4 unit properties in the $200-$300k range that cash flow $1,000+ per month after all expenses (including management) considered. I live in Southern California so I'm open to looking out of area/out of state but would like to stay on the West Coast. 

I've been looking at some areas of the Bay Area (Vallejo, Fairfield, Benicia, Napa) but I'm not quite sold. I'm looking to acquire multiple properties and am struggling to find an area that looks really good where I can focus my search and build up my knowledge of the local market.

I'd love to get some feedback from you guys and hear what markets are working for you. 

You may want to try Sacramento and surrounding communities.

have you looked at apartments in Texas? I heard from a friend recently that there are some good deals out there. 

4 doors -> $250 -> $1000 per month cashflow ?

My community I'm estimating $100 - $125 per door 

minimum via 4 family investing. That would included 12% 

property management, capex 7 - 9%, maint 9%, property taxes ,

and etc.    " c " area investing

Purchase and renovation all-in maximum $160,000 estimate

Now $200,000 - $364,000 all-in would most likely be an

 eight through ten units mixed of 2 and 3 bedrooms.

@Jim Horton I guess I haven't really checked out Sacramento in depth. Do you know what an average return for this area would be in a B to A- neighborhood in this price range? 

well I know my friend just bought a duplex in Galt for $305k and market rent is $1200 per side.....

Galt is south is Sacramento about 20 minutes 

$200-300k in Sacramento would be a B- to C neighborhood (Oak Park, North Sacramento, Citrus Heights). A-/B neighborhood (Curtis Park, South Land Park, midtown) in decent condition is likely starting at $400k.

What do the other Sacramento people say?

Have you looked on the east coast? I don't own any multi family, but I have been investigating to purchase one soon. 

Good luck with your search.

Midwest is the place to be.....Kansas and Indianappolis

I agree with @Embert Madison jr , I think you'd be hard pressed to find a 2-4 unit in an A/B neighborhood in Sacramento for under $400k without needing extensive renovations. Even then, getting the cash flow you desire would be difficult. Good luck in your search.

I'm a big fan of Grand Rapids, Michigan.  Price & cashflow-wise it should meet your parameters.  The market is heating up though.  Every week GR seems to be making headlines - yesterday they were listed 3rd in the nation for job and economic growth:

http://www.higinvestor.com/#!Grand-Rapids-joins-bi...

Thanks for all your feedback guys! @Brian Hamrick Grand Rapids isn't an area I've really heard much about or looked into. Thanks for the heads up, I'll have to check it out. 

@Robert Tropp - I began investing myself when I lived in Santa Monica and worked in Venice, so I know how daunting California prices can be.  I bought properties out-of-state because everything looked so inexpensive compared to Los Angeles.

If you'd like more info on opportunities Grand Rapids feel free to give me a call at 310-403-3892 (yes, I still have my 310 #!)

Hey Robert! Where in Venice are you? I'm out here as well. About to walk over to the beach to go play beach rugby as we speak :)

You won't be able to find those purchase prices or income anywhere in CA, and likely not on the west coast. On the east coast, however, you can get that level of return and not even have to pay $200k for a multi. 

Typically the west coast isn't cash flow friendly for buy and holds. I've always bought out-of-state for this reason. About the only thing that works here is flipping or buying for appreciation.

@Brian Hamrick sounds like you understand my dilemma first hand. It's only gotten worse, prices are insane right now.  So it's going to have to be out of state for me too. Thanks for reaching out I'll definitely give you a call here sometime soon. I'd love to hear about your market.

@Ali Boone  Nice! I'm on Pacific a few blocks south of Windward I'm usually one of those guys out there surfing in the morning :). 

What! I'm on Pacific a few blocks south of Windward. I'm at 19th and Pacific, in the building next door to the big Teena Marie. If you tell me you are in the Teena Marie building I'll die...I'm in there all the time. Omg, where are you, where are you! Lol. I must literally only be a couple doors away from you.

@Ali Boone Haha wow small world! I don't live in that building just right next door to it. 

@Robert Tropp

- there are many affordable investment opportunities in Michigan.  SW MI (Grand Rapids, Kalamazoo, & the shores of Lake Michigan) all provide affordable rentals with good returns.  

Just to give you an idea of what we have here - we are currently looking at a few 4 plexes that are under $100k, but will cashflow $500-$700/month after all expenses.

It is a great place to be!  Let us know if you want to get another view point on the SW MI market.

Good luck! 

Well I've probably walked by you 100 times then! I walk my dogs to that empty lot all the time. If you see a blonde chick with two Pekingese dogs walking by, say hello! I'm embarrassingly usually in my pajamas.

Robert Tropp Ok so I'm going to be the voice of dissent. The people that are contacting you are for the most part marketers for turn key companies. If they steer you to a deal via thier contacts they get a commission. They are not giving you unbiased advice but instead are trying to make money off you. I invest in southern ca and have done well. If you don't have enough cash for a west coast deal, get creative. Try to find owner financing, partner with another investor, loan your money to a rehabber to build up reserves etc. out of town investing is an advanced strategy imo. If after exhausting all of those options you still don't find what you're looking for contact a turn key company that YOU have researched. Good luck!

I've got one in Burien, WA (near Seattle!)

@Robert Tropp

@Jeanette A.

 - I apologize if you thought (even for a second) that I was trying to sell something more than just honest feedback for what I am seeing in my area.  I am new to this investing game & I am very analytical so the numbers are right up my alley.  I get excited when I see what kind of numbers we have here in the midwest, compared to other regions of the US & I like to share them to help others:)

@Robin Secord

No offense taken. Sounds like you're in a great market! Unbelievable to most I too am in great market as well.  Yes buy and hold is tricky in southern cal.  But my objective is to make money. For me the route is lending to rehabbers. There's plenty of money to be made in all markets you just need to adjust your strategy.

@Robert Tropp A while back I would have said Phoenix, but prices are much higher than before and getting that $1000 after all expenses would be pretty hard there right now. Still if you do some searching you may find a deal here or there. 

I know this is an older post but I still like to see what was the best markets for these types of deals. The price point in Cali or NY always higher then the south. I see so some many people investing in Texas area now as well.

Just curious what markets did you get the best feed back on number wise

Alex

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