Rocklin · Member since 2017 · 115 posts · 37 votes
Hi BP,
I am still new at this whole investing. In my other post, I had decided to go for an SFR and aim for an appreciation in Sacramento area.
I have not found a property yet. However, as I was looking around, I saw a lot of multi family units for sale with tenant occupied.
Looking at the numbers , the majority of them makes good cash flow (in my opinion).
I also looked at Stockton after reading @wes blackwell 's post. The cash flow is even greater for multi family units.
So, Why are these for sale???????, If it does making that much cash flow every month. I dont understand why people are selling it.
I appreciate the insights on this.
Thanks!
Tony H. Well, there are a vast array of hypotheticals:
1.) They bought for appreciation, believe Sacramento maybe have peaked and want to 1031 to a new market.
2.) They bought the SFR (or duplex) as an entry point and want to sell (1031) into a 5+ unit on the same market.
3.) The homes are in rough areas where projected rents are far different than collected rents.
4.) You are underestimating the totality of expenses that go along with the subject properties.
5.) They bought the property to improve and flip (i.e. they just aren't buy-and-hold investors).
6.) It was grandmas home, she passed away, and the kids don't a.) want to be property mangers or b.) would rather sell (than rent) grandmas house.
I'm sure I could think of a few others. The reality is that it's likely all of these and more scattered across the market.
Also, a lot of these multi units that I am interested in have tenants occupied. It says do not disturb tenants.
It sounds crazy to me to buy something without looking the inside condition.
Is that normal?
Do you buy tenant occupied property without looking the inside?
when we viewed our recent triplex, which was owner occupied, my wife and I walked around the owners unit, all around the outside and the car port area. got shown copies of the leases and the recent water report which was ran the month before.
my realtor then contacted the sellers realtor for the inspection and i asked the inspector to take lots of pictures. also had a family member present since i live out of state. (report came back almost perfect)
at the closing table after we received the keys, we went to the property and gave each tent a letter explaining the change and where to send the rent. the tenants then invited us in and we did a quick 2min walk around (mainly looking for holes in walls or just general damage)