Moving to Sacramento and getting into small multi family rentals

Moving to Sacramento and getting into small multi family rentals

Sacramento, CA · Member since 2017 · 2 posts · 2 votes

Greetings Pocketeers,

My name is Brandon, I just moved to Sacramento CA and am looking to getting started in RE investing in the Sactown area. in addition to looking into my first deal in small multi family rentals, I want to get my name out to experienced professionals in the area who may be in need of an intern. 

I'm 23 years old, I work as a maintenance technician in hospitality (my fancy job title is "chief engineer" but I'm inexperienced so I prefer technician). I have limited experience in maintenance but am eager and willing to work and learn to provide value to any investor who may find my skills useful to them. I only ask in exchange for being your hands and feet that I may be a fly on the wall to hopefully translate my skills into assets that will help me in my future investment endeavors.

In addition to this, as I said earlier, I am looking into my first deal which I hope to make by the end of the year. I have about 40k in capital which I intend to use as a down payment on a duplex, 3-plex or 4-plex (ideally the latter). I've been reading books and actively involving myself in both the BiggerPockets podcast and blogs for a few months now and have determined that the path I want to take for my first deal is to purchase a 4-plex and living in one unit to get the reduced down payment. As I understand, because I would be living there and seeing as how this would be my first residential purchase, I could get a lower down payment percentage. I am thinking that the BRRRR strategy would be best seeing as how I can live in one unit and handle a lot of the renovation/maintenance myself. I believe that I may also be able to get my parents involved in the deal with me as well, both as investors and helping with the renovations.

I'm interested in your guys' opinions or feedback on my plan, thanks so much for your time reading this post and I look forward to seeing you guys around the blog.

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Gordon CuffePro Member
Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
9y

The market is still hot here so you will want to go to the many rei meetings to find off market deals . I just listed a house for sale at 930am on Sunday and a agent called me around 4pm saying he will be sending over an offer. Just an FYI the brrr strategy is used when an investor pays cash for a property then takes out a loan to get the cash back. You can buy a property going owner occupied with as little as 3.5% down so you will not have worry about getting cash back out of the property. If you ever have questions , send me a email.

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  • Palo Alto, CA · Member since 2017 · 226 posts · 95 votes
    9y

    A lot of money from Silicon Valley is invested in Sacramento real estate. Repairing and renovating might be attractive to those investors. Investment sites such as BP and Meetup meetings in Silicon Valley where you could meet face to face might be a good way to get business. Sorry, I don't have first hand experience with the Meetup meetings.

  • Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    9y

    @Brandon B.

    Welcome to Bigger Pockets. Make sure to read the Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

  • Gordon CuffePro Member
    Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
    9y

    The market is still hot here so you will want to go to the many rei meetings to find off market deals . I just listed a house for sale at 930am on Sunday and a agent called me around 4pm saying he will be sending over an offer. Just an FYI the brrr strategy is used when an investor pays cash for a property then takes out a loan to get the cash back. You can buy a property going owner occupied with as little as 3.5% down so you will not have worry about getting cash back out of the property. If you ever have questions , send me a email.

  • Real Estate Agent · Phoenix, AZ · Member since 2016 · 738 posts · 1k+ votes
    9y

    @Brandon B.

    Great plan! I have several other investors doing the exact same thing. Owning a 2-4 unit property as your first investment is a great idea, as living in one unit while renting out the others will create a significant reduction in your monthly obligation to the mortgage payment, and if you play your cards right you'll even be able to have your mortgage completely paid by the other tenants!

    So instead of dropping $1,000+ per month on your mortgage or rent, you can stash that money away to put towards your next property. While this won't allow you to get rich quick overnight, 10 years from now you'll be MILES ahead of your peers in terms of financial investments and being on track towards retiring.

    I regularly analyze every single 2-4 unit property from Placer County all the way down to Merced, so if you ever need a second opinion on whether or not something looks like a deal, let me know! 

    Also, you'll want to be sure to speak with a lender and then you'll know exactly what terms you'll need to qualify for a loan. It's true that it could be as little as 3.5% down, but it may require a little more since it's a 2-4 unit property. It will greatly depend on the lender.

    What areas of Sacramento are looking at?

  • Sacramento, CA · Member since 2017 · 2 posts · 2 votes
    9y

    oh good point @Gordon Cuffe I suppose it would have to be a bit of a variation on BRRRR, where I buy a destressed property with a FHA and work on the rehab as I go. Do you know anything about the Stipulations of buying a destressed property in our area using FHA? I believe I heard on one of the podcasts that the property has to meet certain standards such as no chipped paint on exterior walls, etc. I'll have to look into that.

    @Wes Blackwell thanks for the encouraging comments, I'm in the market research phase right now so I'm still narrowing it down and as I said I'm new to the Sacramento area, but I'm thinking that I want to be close enough to downtown/midtown area that the property will still attract the millennial crowd that has been migrating this way but not so close that price dilutes my returns, because, from what I'm seeing, fourplexes around here are about 400k turn key. I'm looking in the radius of about 10 miles. Natomas has caught my eye because its close to downtown but also nestled between some sizeable industry parks and The Promenade which is a nice big shopping plaza. It's also driving distance from Arden Mall. I live in an apartment complex surrounded by several other complexes and these 1/2 bedroom apt rent around 1000/mo with amenities like pools and laundry so I think the cash flow from a multi family is competitive with downtown rent prices as well. I still have a lot to learn about market research but that's my thought process as of right now.

    Any resources you could point me towards in the subject?

  • Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
    9y

    @Brandon B. welcome..

    You sound like you're on top of things. You've got the makings of a fine investor.

    I'm looking forward to following your story.

    If you'd like to talk shop and meet more BP'er in real life, join us at the Summit at the Guild on March 18th.

    We're going to isolate good and bad areas in Del Paso, Elk Grove, West Sac and Oak Park. 

    Let's find a place for you to get started.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Al Williamson  I worked for a syndicator back in the 80s and they owned a boat load of those 8 to 20 unit garden apartments in those areas..

  • Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
    9y

    @Jay Hinrichs 

    Yes, those areas were pretty rough back in the 80s. The downtown areana and local economy make slivers of these areas worth a second look. 

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