All Forum Posts by: Tim Kunz

@Account Closed just realized I never responded to your post here.  When I originally posted this I wasn't speaking on any data just my gut feeling more or less.  But I did do some research to see if any of my claims could be substantiated.  Here's a few things I found, I stumbled across this article, unfortunately it is over a year old.  I had trouble finding consistent data on Sacramento median incomes prior to 2005 and currently in 2016.  What I was looking for is an increase in median household income in the Sacramento region from say early 2000s to now.  What I'd like to find is Median Income-to-Median Housing Price from say early 200s, top of the market 2006, bottom of the market 2009/2011, and now.  It's tough to compare ratios with data from only the past 10 years due to volatility of the market, but here are the ratios from my limited data:

Median Income/Median Housing Price in Sacramento

2006: $66,875/$345k = 0.19

2011: $55,085/$138,750 = 0.40

2014: $60,015/$208k = 0.29

I would believe that ratio continues to decrease as the median Sacramento home price is now $277k, meaning median household income would have to grow to $80k to hold the 0.29 ratio and I don't believe it has climbed that high.

This is very basic analysis but continues to support a decline in housing affordability it would be nice to look at consistent data from the early 2000s and late 90s, tacking onto that mortgage rates were roughly double 2 decades ago.

If we are at the high end of housing affordability what will the imminent rate hike do to the market?  Can the minimum wage hikes continue to fuel pricing increase or will we see people begin to get laid off by small business who may not be able to afford such increases. We'll have to wait and see.

I'd love your opinion on the whole thing, I'm disappointed I didn't get a chance to meet you at @J Martin's meet up a few weeks ago, but am very impressed by your resume after reading your post on making $2 million in the bay area

Inflation Adjusted Income Source

Median Sales Price Source

@Aaron Bry welcome to BP, you're definitely ahead of most individuals your age including myself at 27. That's awesome.  With your ability to put some sweat equity into your properties you are open to a few more opportunities.  I think Elk Grove is a great area, it is harder to find fixers out there partially due to the limited age of homes and pride in ownership by majority of owners.  But the schools are obviously great and I imagine new families will continue buying out there.  They are building a lot of homes out that way though, off the new consumes exit on I-5 there is a huge development project underway, which may affect home values.  You should check out some of the meeetups in town, they are great for networking.  @Al Williamson is holding one at the end of the month which should be a great event.  Best of luck you, hope to see you around.

@Carrianne Mucho from what I've read the bill limits the reasons approving jurisdictions can use to deny permits for building "granny flats", and also shortens the time in which the jurisdictions must approve or deny the permit.  So this should have some effect on Lincoln since it applies to all of California, but cities may find other ways to limit them.

This seems like a basic question but where are most of these people who are looking to rent currently living? Are these millennial living with there parents? Multiple families living under one roof?

Things I see affecting the rental market:

Increases in number of renters:

- Housing affordability due to a fed rate hikes subsequently raising mortgage rates

- Millennial's desire to both live in urban areas which are more expensive and the desire to remain mobile

- Baby boomers moving to retirement communities?

- Less desire to own homes amongst millennials. (Several studies showing desire for "experiences" rather than material objects)

Increase in rental prices

- Low availability paired with minimum wage hikes

Decrease in rental numbers and prices:

- Increase in home building

- Legislation such as SB1069 driving prices down by increasing available units

Obviously in terms of the Sacramento market I can only imagine there will be continual spill over from the bay area with the ability to work remotely and affordability for first time home buyers (millennials) still relatively low in the bay area

These are just a few things that come to my mind I would like to know others take on these and other factors.

@Josh Sharon welcome to BP! That last one you did, that's impressive underwriting such a unique property with limited experience in that type of real estate I'm guessing.  Are you focusing locally or out of state for your next few deals?

@Justin Silverio thanks for great information, it looks like you have a very efficient marketing business up and running.  I'm currently working on scaling up my direct mail efforts and had a few questions.

1) Is there an efficient way to scrub your list for houses that get listed or sold? Right now my list only exists in excel form, and I haven't found an effective way to rid it of dead leads (i.e. recently sold)

2) Where do you find the best pricing on envelopes? I have found cheap #10 size envelopes but cannot find a good source for a more personalized A6 (or similar size) envelopes.

Thanks in advance for any input

Welcome to BP @Nancy Duong, this is a great site.  You're in the right place.  Definitely check out some of the local meet ups as well, they are great for networking as well.  Hope to see you around town.

I'm sure people have come across these articles, just looking for others take on them

Sacramento Rental Market Growth

1) I can't find another site to substantiate this data, I believe the Yardi Matrix is a fairly trustworthy data source though, have others witnessed this first hand as a Sacramento landlord or found other sources to substantiate this?

2) How far do you see our median rent rising before it tops off?

3) Do you see the passage of Senate Bill 1069 having any substantial effects on the market?

@Andrew Gillings welcome to BP! You're in the right place. Definitely check out the Ultimate Beginner's Guide and all the other educational stuff BP has to offer.  There are several REIAs in the area as well, most can be found on meetup.com.  Let me know if you want more insight into these events.  

I'm also just getting into REI, I'm not an expert by any means but have been educating myself for over a year now and can help answer some of your questions. Shoot me a message if you want to sit down and talk sometime

-Tim

@J. Martin thanks again! Overall truly great event, ton's of information packed into 2 days (maybe too much my head is still spinning with so much new knowledge and ideas).  Hopefully we can do it again next year!

Welcome to BP @Shakira Rule. You've come to the right place, tons of education and knowledge here on BP. Also, check out some of the REIA meet ups in town. Most of them can be found on meetup.com just search Real Estate Investing in Sacramento. Best of luck hope to see you around town.