Considering a 1b/1b in South Natomas for MTR
Hi All,
I'm a new investor in the Sac area still learning and just getting started. I'm considering trying out the MTR route and looking at a few 1b/1b in South Natomas (pretty close to Natomas Crossing).
Has anyone seen success with MTRs (30+ day min) in this area? Or is it more lucrative to purchase closer to the hospitals i.e. UC Davis, Sutter, etc. I was mostly looking at South Natomas for its lower price point.
My goals are cash flow + long term appreciation. Thanks in advance for the guidance!
Hey @Ashley! a lot of these condos have crazy high HOA's so I would first take a look at those to see how it plays into your metrics. With that being said after taking a brief look at airbnb and furnished finder to see what something like that goes for on the market, it seems like inventory is pretty low (good for you) but the numbers are kind of all over the place (hard to pin down). To break it down even further lets say your gonna buy one for: 245k, 20% down, 6.25% interest, $200 HOA per month. you're looking at a monthly payment of about $1733 a month. So would you be able to rent MTR for lets say 1950 a month to give you solid reserves and cap ex? I would lean probably not. but it would be close! You may be able to buy for less or even no HOA idk but you got to get real in touch w the numbers to determine if this is going to work for you numbers wise. from an appreciation standpoint, Sacramento will go up over the long term, that I can assure you lol but in the immediate I wouldn't count on any real appreciation for at LEAST 18-24 months. which is normal. If you'd like to discuss more or even discuss areas that might be better suited id be happy to help! best of luck!
Hi Ashley! If you decide to purchase in a location that is further from hospitals, just make sure that there is something else nearby to draw folks to your area. Hospitals are a consistent and reliable metric for attracting traveling professionals, so if you choose another area of town, make sure that there is something else nearby (a utility plant, large headquarters, etc.) to attract potential tenants. I hope this helps. Best of luck!
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Hey Ashley, congrat's on your real estate investing journey. Sacramento and beyond is a great market. I'm an investor friendly agent and I also invest, project manage, and property manage my own portfolio of rental properties, including short term furnished rentals. I only work with investors as an agent, and provide A-Z experience, resources, connections, etc. to help investors in the region. Let me know if you want to jump on a call to chat. Have a great rest of your week.
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@DJ Dawson thanks for the detailed reply, I appreciate it! It's true that the HOAs are quite high and cut significantly into my cash flow. I'm baking in some pretty conservative factors wrt vacancy, capex, maintenance, etc. and even then I'm cutting it close. I agree that Sacramento will be good long term from an appreciation standpoint but I'm also in a position where I need to see positive cash flow #s, which means I may have to consider OOS or potentially househacking in Sacramento if I find a good opportunity.
@Scott Scoville really great to connect with you as well!
@Sarah Weaver omg I am fan girling a bit :) I just finished reading your book and it is a HUGE inspiration for looking into MTRs specifically. I can't remember the last time I read a book that quickly.
Mind if I ask, are there any other markets you suggest? I am open to investing OOS (currently based in California) and am eyeing Ohio - specifically Columbus or perhaps Cincinnati for MTRs.