West Sacramento, CA · Member since 2016 · 4 posts · 1 vote
Hello happy Saturday, so I'm newbie to Real Estate investing. I'm currently in the process of buying my first deal it's a Duplex here is some details. Price is $250,000 one side has 2 bed 1 bath and other side has 3 bed 1 bath. The Duplex is currently has both sides being rented for $800 each bringing in $1600 each month. My mortgage payment will be around $1,100. I know I can probably raise the price of the 3 bedroom side at least another $100. Please any Advice.. is this deal good.? I'm located in California
A few miles from downtown tells me nothing. It could be a fantastic deal with under market rents or it could be terrible. Six blocks can be a $100k swing in many parts of Sacramento.
@Erick Arauza, without knowing more information, just based on the numbers you are most likely going to break even most months and lose money some other months (vacancies, turnovers, etc.) I agree with @Derek Jones, $200k would be a consideration but still a careful one. You're probably not going to get much appreciation and if the market softens, you may be underwater. Having a first deal like this may leave a bad taste for real estate, so I would encourage you to be VERY careful and not jump in based on emotions.
What everyone else said about specific location is very true - neighborhoods are very different, even within a couple miles of downtown.
Also, for comparison, I know of someone who purchased a 4plex not far from Sac State for 50k more (300k) and the average unit is giving out $800 and can probably go even higher. The area is improving as well. So that's just for comparison. I think you can do better. And be careful about what an agent tells you - even if they are honest, they may not understand the investment side when giving you advice, many think very differently from the way RE investors think.
and btw, I'm in W Sac as well, would be great to meet in person sometime!