Investing under $300k

Investing under $300k

Member since 2018 · 41 posts · 11 votes

I am trying to understand where the best investment areas for rental income in Sacramento are nowadays.  The pricing has gone up from when we invested 5 years ago.  Ideally, a multi-unit without much fixing up would be best for cash flow purposes.  But there are few properties around $300k or less.  There are smaller SFRs that can be had for around the price range but I don't know what the rentals go for there and know that SFRs will net lesser cash flow than multi-units like duplexes/triplexes will net with a 20-25% down.  I don't know the areas well but obviously closer to downtown the better?  Nicer areas that have greater rental incomes and better long-term tenants.  I know I am asking for what most people want but wanted to understand the neighborhoods better.

East Sac?  Land Park?  What about areas west of the 99 and south of the 50?  

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Real Estate Investor · Sacramento, CA · Member since 2014 · 78 posts · 41 votes
7y

Jason,

 I live in East Sac and have rentals all over town. Getting something in East Sac or Land Park which is multifamily under 300k with low fixup would be a dream for all of us but if you are looking for real deals then I suggest Tahoe Tallac (the right side of Stockton blvd not the wrong side) and Rosemont. 

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  • Member since 2019 · 23 posts · 39 votes
    7y

    In 2018 in Sac County there were:

    • 576 SFP flips (purchased/resold in 6mo or less) in the 250k-750k purchase price zone that saw 10% or greater return. 469 saw 30%+
    • 1,721 market purchases of SFR homes in the 250k-750k zone that are now non-owner occupied. Even if only 50% of those are buy/hold investments (probably much higher since Sacto isn't a vacation destination), a very good number.
    • 471 market purchases of MFR 2-4 in 2018 in the 250k-750k zone.

    Investing in Sacramento is absolutely making sense for some folks. Just maybe not all. 

  • San Francisco Bay Area · Member since 2019 · 24 posts · 6 votes
    7y

    @Harvey Levin

    I would definitely like to follow up on your opportunity if I zero in on Indianapolis for my OOS investment portfolio !

    Looking forward to it.

  • Pleasanton, CA · Member since 2016 · 73 posts · 48 votes
    7y

    @John Collins Hey John thanks for the info, can I ask where you got the data from?

  • Member since 2019 · 23 posts · 39 votes
    7y

    @Medi Sarwary I live in PropertyRadar.com. Their new Insights are amazing. The core technique I use is covered here: https://help.propertyradar.com/using-propertyradar/tutorials/finding-flippers

  • Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
    7y

    @David Noh definitely some cheaper property in chicago but i don't love owning rentals there. 200-300k is still too expensive, their taxes are ABSURD out there, and laws very very heavily favor the tenants. You can get 1.5% deals with better laws right over the border in Indiana in markets secondary to Chicago and this is where I've made my portfolio! 

    Without being overly complex- The laws make eviction VERY easy. Tenants understand this as well. This particular market of indiana also has a high rental demand due to the chicago tenant pool spilling over. In conjunction with the solid landlord-tenant laws this tenant competition yields a better understand amongst tenants that lack of compliance is not tolerated much! These circumstances also improve the feasibility of investing in low income and fixed income housing, making higher cash flow C class opportunities potentially less risky than they would be in markets that don't enjoy these conditions.


    Team building was pretty simple, but not easy. It just took many referrals & trial and error. Dirty work, if you would.

  • Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
    7y

    @Pete Tam

    We do have a PM we've got a pretty strong relationship with. It took some time, but we've really got our dynamic down.


    I'd ALWAYS recommend using property management unless you have an enormous portfolio and decide to build a management company to service it. Otherwise, don't save 8-10% and give yourself a low paying job that you're probably not going to be that great at compared to an expert- IMO.

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