All Forum Posts by: Wes Blackwell

@Tony H.

I work a lot with California investors in Sacramento, and my general advice when it comes to out of state investing for beginning investors is "invest where you know."

Sacramento is a great market for multiple reason... rent growth rent triple the national average, plenty of appreciation coming from Bay Area migration of millennials, tech companies moving out here and tech employees from the Bay Area working remotely out here, and if the high speed rail project gets completed in the next 10-20 years and connects Sacramento to SF in less than an hour the Sacramento market will absolutely EXPLODE.

Plus, beginning investors like the idea they can go and visit the property any time they want, specifically in an emergency situation. God forbid a car crashed into your property or it catches on fire, but do you have the ability to fly out there for a week and meet contractors, insurance agents, etc. if that happens?

Plus, do you have "boots on the ground" so to speak, in the form of friends, family, etc. that can visit the property out of state if needed for some reason? Do you already have a real estate team in place that you can trust? I have about a dozen horror stories of some guy buying in a market he knew nothing about and believing the value some turnkey company placed on the property, and overpaying by thousands (big deal in a sub $100k market).

Not trying to scare you away from the idea, but you have to do your due diligence. It's going to take time, visits to the market, building a team, research, etc. You may already have most of that for the Sacramento region since you're from here, but you're starting from scratch in a market out of state. Much more likely to make a mistake and buy in the wrong area and overpay if you don't do the proper research.

I generally only recommend to more seasoned investors, but it can definitely be done. But with a hot market with long-term potential so close to home, why bother?  

@Gary B.

My strongest suggestion for services like this for my clients is to look on Yelp in the Sacramento and Roseville area and call the top 5-10 rated pest control companies.

Everyone is going to have a different service level, schedule, and pricing. It's like hiring for anything else, you have to do some initial interviewing. 

On your lease agreement there should be a paragraph about who is in charge of handling pest control for the property, the tenants or the landlord. (It's boilerplate in the California Association of Realtors contract).

@Ken Breeze

Hey Ken, I'm very familiar with 2-4 unit multifamily and working with investors in the Phoenix area. I'll reach out to get more information (such as price range) as per your instructions. Cheers!

@Arkadiy Voronchenko

I work a lot with investors buying property in Sacramento, and one lender I've always had a great experience working with is @Chris Mason from Bay Equity. He REALLY knows his stuff when it comes to analyzing the numbers on investment properties and helping you make the most informed decision on your loan product and property. Definitely make sure he's one of the lenders you interview and consider.

@Adonias Dawit

Main problem with anything you try to buy off the MLS is that your FHA 203k offer is going to get thrown in the trash straight off the top.

Hate to be so blunt, but it's an EXTREMELY competitive market. Sold a fourplex last month, put it on the market on Friday and had five offers by Monday, all with at least 25% down conventional, and two cash offers.

It's not impossible, it's just going to take some patience. If you can source your own deal you'll have a lot more luck, but then your potential pool of properties to choose from is a whole lot smaller. Any seller with half a brain would hire someone like me to sell it above the asking price in less than a week rather than sell it off-market for a discount.

@Andy Shah

I see you're new here, so the best way to contact people is to click on their profile and click the "connect" button near the top. This allows you to "friend" other members on BiggerPockets by sending them a Colleague Request.

Often though, real estate professionals will have their contact information right there on their profile, as do I.

Pro Members will have it at the bottom of their bottoms, kinda like a signature in an email.

I'll send you a colleague request right now and we can talk Sacramento real estate :-)

@Kantrell Bland

Have you already gotten pre-approved? Do you know how much you're pre-approved for?

These properties range from $200-600k so there's a wide range of selection available.

Also, how much money do you have for repairs & upgrades? How much work are you planning to do? How much much of a "project" do you want?

Lastly, what part of the Phoenix Metro Area are you hoping to be located in? I suggest being located close to work because the commute times can be killer if you're traveling from one side of town to another. Take a look at the map below of available triplexes and fourplexes:

As you can see, there's quite a bit of criteria to consider when searching for the perfect investment property. Give us a few more details and we'll be happy to point you in the right direction :-)

@Bill Fried

Well for one, let's take a look at median home values:

Fairfield: $442k
Vacaville: $442k
Sacramento: $317k

So for an investment property with 25% down and a 5% interest rate, Sacramento is going to be about $670 less per month for PITI ($1,698.96 in Sacramento vs. $2,368.90 in Fairfield / Vacaville).

Yet, according to rent cafe, the average rent is only about $400 more in Fairfield ($1,681) than in Sacramento ($1,289).

Plus, Sacramento has a year-over-year rent growth rate that's triple the national average:

https://www.biggerpockets.com/forums/621/topics/590913-rent-growth-in-sacramento-is-triple-the-national-average

Further, Solano county has a population just shy of 500,000... while Sacramento county has a population three times that at 1.5 million (add another 375k for Placer county too). Fairfield and Vacaville don't offer enough of a "big city feel" to attract Bay Area millennials. That's why they're moving to Sacramento instead:

https://www.biggerpockets.com/forums/621/topics/396725-millennial-migration-to-sacramento-2017---here-comes-the-rush

As more and more tech companies allow employees to work from home or commute part time, and more and more start ups head out to Sacramento to save on office space and employee pay, the city will just get better and better.

And while it will take AT LEAST another decade to come to fruition, once the high speed rail project connects Sacramento to San Francisco in under an hour, Sacramento will BLOW UP when tech employees with $150k+ per year salary realize they can cut their housing costs by 50-75% and live like a king in Sacramento... all the while working on the train into the city (or doodling around on Facebook instead of having to focus on the drive and deal with traffic).

https://www.sfcta.org/california-high-speed-rail-project

I know Sacramento better than just about any agent or investor out there (toots own horn), and these are the reasons investors (and residents) are skipping over smaller areas like Vacaville, Fairfield, Tracy, Modesto, Merced, etc. are instead setting their sights on Sacramento.

@Jeanine P. @Justin F.

Thunder Valley Casino opened in June 2003, during the prime ramp up period in Sacramento and Placer County for real estate values during the creation of the housing bubble. Therefore, it's impossible to predict how it affected housing values because housing values went up and down so dramatically for the first decade of it's operation (2003 to 2013). First it went sky high and then it hit rock bottom. 

The Elk Grove Casino will be built during a much more stable market, so it's impact - whether positive or negative - should be much more clearly felt. There won't be all the noise from the outrageous housing market of the mid 2000's.

@David S.

Here's an article I wrote regarding rent control in Stockton and Sacramento. But it basically applies to all of California, including the Bay Area. It should help give you some food for thought, and @Paul Choi shared some great thoughts on the topic as well:

https://www.biggerpockets.com/forums/621/topics/585796-sacramento-rent-control-101-everything-you-need-to-know