Duplexes in Midtown Sacramento
Hello all,
I have real estate holdings out side in Midtown, Sac. I would love to position myself to buy in Midtown but at current prices and rent levels I can't make numbers work even with 30% down payment. I have thought about 1031 exchange into Midtown from other property but still, numbers are tough. Any advice or is there something I am missing?
Here's some advice, if you are going to buy in Midtown do it now. All of the investors and people I know who live there are being priced out since the arena is almost done. The prices and rents are being increased dramatically. People who I work with have rents being raised 50% within three months.
I can't verify whether it's like that throughout all of the downtown area but all that I have talked to aren't happy with it, unless you are the owner of the property. I don't see how all of the rents can keep going up. I think there will be a large group of people moving out, to include businesses, and then the rents will go down some until they get back down to a point where people are willing to pay to be in that area.
Nope, you aren't missing anything. Midtown doesn't make sense for investing and it hasn't for a while. Everything I see for sale puts you in the red monthly unless you put down 40+% down.
The only way I see midtown as a good investment at this point is if you find a distressed property and buy it on a discount to fix up and rent yourself. Like others have said, the current asking prices are crazy high for the income they bring. I'm sure you can find better ROI in the surrounding areas!
The grid is overpriced in my opinion but landlords have no shortage of qualified renters even with large rent increases. Who knows. I remember passing on a 4 plex of 2/1's on E for $410k in 2012 because I felt it was overpriced... I wish I had a mulligan on that one.
Thanks to everyone who posted. I really learned a lot about whether to invest in this part of Sacramento. Seems like I should put my money, efforts, and energies in other areas of Sacramento until this region cools off a bit.