Hello! We are considering buying a multifamily property: duplex/triplex in Sacramento with 5% downpayment conventional loan. We are new to the area and are currently renting. So the plan is to live in one unit and rent out the other one. But I am also keeping in mind that if we decide to rent out both units in a couple of years, it should cashflow. Would this be even possible in Sacramento area on the current market ? In which areas? Also we have kids who will go to school in 1.5 years, so have to balance somehow financial side of it and better school areas. I would really appreciate any suggestions. Thank you!
Rental Property Investor · Palo Alto, CA · Member since 2021 · 27 posts · 22 votes
5y
@Yulyana Karpava
Buying a cash flowing property in Sacramento area is possible, but it's not easy. It's rare to find a cash flowing property that's a straightforward turnkey SFH or MFH. Like was said earlier, need to look for "non traditional" properties. Look for unpermitted ADUs, "granny units", detached large garages that you can convert to ADU. Or go the route of a property that needs a lot of work and is significant discounted. If it's unpermitted, it can be more problematic to get conventional loans, but this is why it's able to cashflow. Similar to a "handyman special" which may have difficulty getting loan. Also with 5% down, it will be even more difficult to cashflow later given the higher mortgage payment. Usually for investment properties you're looking at 25% down.