Fresno, CA Advice
Hello BP Community,
I am interested in acquiring a quadplex in Fresno. I have been told by a REA from Folsom about the potential growth for positive cash flow. Not sure if the REA is leading me down a dark alley. I would appreciate some feedback from local investors in the area.
Thank you.
Hi @Amir B., like most metropolitan areas, each neighborhood in Fresno/Clovis is unique. I am initially skeptical that an REA in Folsom has the particular knowledge relating to these unique neighborhoods, but, even assuming he knows the market, please be aware of the following.
Typically, the boundaries for "A Class" properties in Fresno are Shaw to the south, Blackstone to the west, Copper to the north, and Fowler to the east. Within those four boundaries, you are looking at prime North Fresno/Clovis real estate with some of the best schools in the state, virtually no crime, and newer homes occupied by professionals and upper middle class/upper class families.
East of Fowler is not dense enough for real estate investment and is rural territory. West of Blackstone can be fine, but is more B class; similar with northeast of Shaw. South of Shaw can get hairy pretty quickly. The Tower District, which is Fresno's nighttime hot spot is revitalizing, and you can consider that area a B area. Mostly anything south of Shaw, west of the 41 or south of the 168 are either Class C or true war zones.
If you know this going in, you can better prepare yourself for discussions with your REA. I hope this helps.
Amir B.
Finding a multi unit in a A-B class area in Fresno/Clovis that is + cash flow is not realistic at this time. Most of what's out there is not even meeting the 1% rule and have deferred maintenance or upgrades needed. I've been looking for a multi family for my wife and I since last fall as a house hack and cannot find anyone willing to look at the numbers on rental income.
Now we're expecting (baby) and I'm getting worried that we won't get a deal and we need the extra room. Good luck out there!
Originally posted by @Chris Allard:
Amir B.
Finding a multi unit in a A-B class area in Fresno/Clovis that is + cash flow is not realistic at this time. Most of what's out there is not even meeting the 1% rule and have deferred maintenance or upgrades needed. I've been looking for a multi family for my wife and I since last fall as a house hack and cannot find anyone willing to look at the numbers on rental income.
Now we're expecting (baby) and I'm getting worried that we won't get a deal and we need the extra room. Good luck out there!
Hi Chris,
Thanks for replying. I am sorry that you are also having trouble finding cash flowing properties. I also can't afford Sacramento anymore, so decided to look in Fresno area.
Good luck to you as well.
Great demographic advice from Garret.
Originally posted by @Garrett M.:
Hi @Amir B., like most metropolitan areas, each neighborhood in Fresno/Clovis is unique. I am initially skeptical that an REA in Folsom has the particular knowledge relating to these unique neighborhoods, but, even assuming he knows the market, please be aware of the following.
Typically, the boundaries for "A Class" properties in Fresno are Shaw to the south, Blackstone to the west, Copper to the north, and Fowler to the east. Within those four boundaries, you are looking at prime North Fresno/Clovis real estate with some of the best schools in the state, virtually no crime, and newer homes occupied by professionals and upper middle class/upper class families.
East of Fowler is not dense enough for real estate investment and is rural territory. West of Blackstone can be fine, but is more B class; similar with north east of Shaw. South of Shaw can get hairy pretty quickly. The Tower District, which is Fresno's nighttime hot spot is revitalizing, and you can consider that area a B area. Mostly anything south of Shaw, west of the 41 or south of the 168 are either Class C or true war zones.
If you know this going in, you can better prepare yourself for discussions with your REA. I hope this helps.
Hi Garrett,
Thanks for replying with this information. You are right about the REA. She is sending me mostly war zone MFH's. It's partly my issue also, I can't afford more than $300,000. I will re-analyze the listings.
Another BP member mentioned that it's tough to find cash flowing MFH properties in Fresno area. Do you think that's the case? I only considering Fresno/Clovis area because of the REA. Otherwise, I could stay in Sacramento area.
No problem, @Amir B. There are definitely properties in Fresno that cash flow and are around $300,000. For example, just scan Loopnet - Fresno, and you'll find this fourplex: http://www.loopnet.com/Listing/19917623/2553-S-Hol...
Looks to be in fairly good condition, 7% cap rate, actuals of $22k NOI, and public records show the property was purchased in 2015 for $290k. "There's probably some wiggle room on price, and the financials are solid; I should take a further look." Or, at least, that's what someone who doesn't know the intricacies of the area would say.
Unfortunately, the moment I saw the cross streets, Jensen and Golden State in Calwa (an unincorporated CDP in Fresno), I clicked next. Cognizant of the demographic rules above, we know that this property is in a war zone. And we can confirm this by looking at criminal data in South Fresno. Finally, we should know that large stretches of Golden State are notorious for prostitution and drug dealing.
By contrast, let's look at a property in Clovis: http://www.loopnet.com/Listing/19833265/605-W-Ashl...
This fourplex is listed at $415,000, with a 3% cap rate, and actuals of $12k NOI. While the cash flow (if any after debt service) is trifling, I know that because this is in a great area (Willow and Ashlan, right next to Fashion Fair and Fresno State), I'm going to have a great tenant pool and feel comfortable visiting my property.
In sum, there are properties in Fresno that cash flow in your price range. You will; however, have to balance the potential cash flow against the many risks of owning in a war zone.
Willow and Ashland is ok. I lived off of willow/peach and there are criminal activity in this area as well. Mostly drug issues. Old fig, north of Shaw, east of the 168 are better areas. The margins are so slim that you do leave any room for mishaps.
Current rent on that Clovis 4plex is also in what's know as the Tarpy area in Clovis. That's the first place most ppl from Clovis say to avoid, so it's not a desirable area. Property at best will bring in 3k/mo in gross rent, so 415k is too steep (.7% yield). 240k purchase price is a 1.25% yield which is reasonable if you can get the seller there. Remember is not the greatest of areas. C+ at most and that's due to in being in Clovis USD (1 of the top school districts in US)
Originally posted by @Garrett M.:
No problem, @Amir B. There are definitely properties in Fresno that cash flow and are around $300,000. For example, just scan Loopnet - Fresno, and you'll find this fourplex: http://www.loopnet.com/Listing/19917623/2553-S-Hol...
Looks to be in fairly good condition, 7% cap rate, actuals of $22k NOI, and public records show the property was purchased in 2015 for $290k. "There's probably some wiggle room on price, and the financials are solid; I should take a further look." Or, at least, that's what someone who doesn't know the intricacies of the area would say.
Unfortunately, the moment I saw the cross streets, Jensen and Golden State in Calwa (an unincorporated CDP in Fresno), I clicked next. Cognizant of the demographic rules above, we know that this property is in a war zone. And we can confirm this by looking at criminal data in South Fresno. Finally, we should know that large stretches of Golden State are notorious for prostitution and drug dealing.
By contrast, let's look at a property in Clovis: http://www.loopnet.com/Listing/19833265/605-W-Ashl...
This fourplex is listed at $415,000, with a 3% cap rate, and actuals of $12k NOI. While the cash flow (if any after debt service) is trifling, I know that because this is in a great area (Willow and Ashlan, right next to Fashion Fair and Fresno State), I'm going to have a great tenant pool and feel comfortable visiting my property.
In sum, there are properties in Fresno that cash flow in your price range. You will; however, have to balance the potential cash flow against the many risks of owning in a war zone.
Thank you so much. That is something I am dealing with now in Sacramento. It's difficult to find a good area and positive cash flow in my price range. Would you recommend to stay near me (Sacramento-duplex) or try Fresno/Clovis-quadplex? This might be a tough question for you.
I agree @Chris Allard; the purchase price on the Clovis fourplex is steep. I can see how Tarpy might be less desirable than, say, North Fresno/North Clovis, but compared to the other property in Calwa, it is leagues ahead in desirability. Also, you're right that the desirability is largely due to proximity to the award-winning Clovis schools.
[Double Post.]
I'm a local buy and hold Multi and SFH investor here in Clovis/fresno. My last 2 properties I close was last year. I bought it through motivated owner and Bank owned. my C/C return is about 12 to 15%. I think I just bought my last 2 properties here in Clovis/Fresno, prices has risen and the 1% rules does not apply anymore. I'm buying now in TX & FL where it makes sense right now.
I've been sent this listing by my real estate agent at 1467 Roberts Ave Clovis CA 93611. It's a 3 bed 2 bath 1,096 sq. ft. I'm looking to rehab and rent it out. I'd like from everyone to get an idea on how this location stacks up in terms of rental desirability. Is this a good purchase price and how much do you think I could get in rent? I'm just getting started and my fear factor is high so could use some help assessing this property.
I'd really value the experience and knowledge of the area in this forum to help me avoid a huge mistake!
Thanks everyone
That house on Roberts is selling at a good discount to what the local comps are and currently has at least 10 offers on it right now. Its an all cash purchase - They have already requested highest and best on this one. It has some electrical issues that need to be dealt with as well the carpet / flooring will need replacing - also appears to have some roughed up counters in the kitchen - hence the extremely low price - could be trying to get a biding war going on too - but as it is it is selling for $127/ sq ft compared to local comps which are at about $141 / sq ft.
Average rents in the area are roughly 1100 - 1200 / mo
With vacancy rate, management, and repair budget it cashflows to the tune of about $103 / month - of course if you can keep it filled, and manage it yourself there is more meat ion the bone. But I always run calcs with management, vacancy, and repair budget just to make sure there is wiggle room. I'm sure you could easily manage this yourself until you get more units.
I haven't been able to get inside it as it currently has people in it who do not want to show until they have an accepted offer. Great eye though! this is exactly the kind of property my investor clients are looking for. I have an offer in on it right now.