Investor · Capitola, CA · Member since 2020 · 52 posts · 19 votes
Hello All,
I am returning to RE after taking 6 years off, as last purchased a MFR in Roseville that was an amazing deal in 2014. I would love to buy here again, but do the number still work for buy and hold investing? Thanks!
Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
5y
Look into the Central Valley . Yes there are still delays that make sense and also Blair add still exists especially now with adu being encouraged . I hope this helps .
Investor · Capitola, CA · Member since 2020 · 52 posts · 19 votes
5y
Interesting thanks. I just love older homes and bought a house with a guest house in Roseville, which needed remodeling and new electrical, the back unit as well. It was 225 then due to the work needed and the seller wanted out fast. I had to fight to keep the deal since my credit was recovering from the 2008 meltdown. Since then I have seen the rents go up and it's close to1500 a month positive--I wish I could have done more!
Now returning to the scene of the crime and hoping for good luck again:)
La Honda, CA · Member since 2020 · 11 posts · 37 votes
5y
Just a data point, of course, but I purchased a duplex in Carmichael a year ago and it is cash-flowing (even with a property manager). The purchase price was $424k, I've put $40k in thus far (rehab-ed one side). My monthly PITI + PM is $2200 and combined rents for both sides are $3100 (a legacy tenant is about $150 below market, so that has a little room to grow too). I know in some parts of the country these numbers wouldn't be great, but I am pretty happy with it given it is California. It seems like the Sacramento still has some growth potential. I've been really happy with Carmichael - seems like a great little spot.
If you want a great property manager in Roseville I highly recommend RentPros (https://rentpros.com/). I have no affiliation with them, but they talked me out of my first target property (thankfully!), recommended a couple of areas (including Carmichael) and then handled the rehab on this place wonderfully.
Just a data point, of course, but I purchased a duplex in Carmichael a year ago and it is cash-flowing (even with a property manager). The purchase price was $424k, I've put $40k in thus far (rehab-ed one side). My monthly PITI + PM is $2200 and combined rents for both sides are $3100 (a legacy tenant is about $150 below market, so that has a little room to grow too).
I'm curious, do folks normally only consider PITI + PM - rent as cash flow? What about maintenance, reserves, vacancy? For this type of property, in my model, I add $100, $200, $250 per month for those items respectively. Any thoughts? This might be conservative, but everything is relative and I use this to compare investments and worst case return.
Investor · Capitola, CA · Member since 2020 · 52 posts · 19 votes
5y
I dont have all your numbers but to me it's the opportunity cost of your cash. Is it better spent elsewhere? If not, then it's a good play given rents and values are trending up...
Just a data point, of course, but I purchased a duplex in Carmichael a year ago and it is cash-flowing (even with a property manager). The purchase price was $424k, I've put $40k in thus far (rehab-ed one side). My monthly PITI + PM is $2200 and combined rents for both sides are $3100 (a legacy tenant is about $150 below market, so that has a little room to grow too).
I'm curious, do folks normally only consider PITI + PM - rent as cash flow? What about maintenance, reserves, vacancy? For this type of property, in my model, I add $100, $200, $250 per month for those items respectively. Any thoughts? This might be conservative, but everything is relative and I use this to compare investments and worst case return.
You are, of course, right. I did do a bit of a short-cut there. For example, one of my tenants is a couple of month's behind because of employment issues relating to covid. It was more meant to be a sketch. If you want to add $250 to my numbers, please go ahead. Let's add $400. $2600 outgoing, $3100 incoming.
It depends what you are looking for, really. I have some places in KY too, they have such a different profile. Better CoC return - but, to me, I'll only know the true ROI in 10, 20, 30 years. I wasnt really trying to focus on 'cashflow' just trying to provide a real and recent datapoint.
It depends what you are looking for, really. I have some places in KY too, they have such a different profile. Better CoC return - but, to me, I'll only know the true ROI in 10, 20, 30 years. I wasnt really trying to focus on 'cashflow' just trying to provide a real and recent datapoint.
I was trying to see how other folks model those expenses. I agree with your ROI strategy. In CA, I look at the total return after selling @5, 10, 20, and 30 years and decide whether to make the investment. What is your appreciation assumption? For Sacramento, I assume 3% annual appreciation. Then I calculate my total return at those points in the future.
It depends what you are looking for, really. I have some places in KY too, they have such a different profile. Better CoC return - but, to me, I'll only know the true ROI in 10, 20, 30 years. I wasnt really trying to focus on 'cashflow' just trying to provide a real and recent datapoint.
I was trying to see how other folks model those expenses. I agree with your ROI strategy. In CA, I look at the total return after selling @5, 10, 20, and 30 years and decide whether to make the investment. What is your appreciation assumption? For Sacramento, I assume 3% annual appreciation. Then I calculate my total return at those points in the future.
Sacramento has been 4.5% since 2000. If you break it down by price point only including rental stock ($350 or less) its 6.1%. Rents have increased 5% annually, I'm no expert on the midwest but I know rents in Knoxville TN where I went to school are not that much higher than they were in 2000.