I'm a little late to the party... but I do agree with Jim somewhat.
However I think you can buy a duplex in a decent area and you will get a cash flow higher than a single family and you'll get the appreciation over time as well.
Here's a link to a duplex in Rancho Cordova that has excellent cash flow. It's going to close escrow sometime next week at full price. We've rented up the 3 bedroom side at $1,150 and have applications for the 2 bedroom side at $975. And best of all...? it's all fixed up.
Go to the link below and you'll get the cash flow figures and a video so you can see what a duplex can look like.
I hope this helps...
Make it a Great Day...!!!
Try 95842 - 19 listings, / 95841: - 7 listings, 95843 / 10 listings, 95660 47 listings. / 95838: 24 listings / 95815: 22 listings , / 95833: - 19 listings.
Yes there are zero in Folsom, Granite Bay, and only one each in Roseville and Rocklin. Forget those towns on your budget.
You want cash flow? Put 30 or 40% down. You are putting only 20% down so you can leverage to the max. That is 4 to 1 leverage. I'll explain the benefit of that at the bottom.
You are asking for the world when you expect a large positive cash flow in a high price zip code with maximum leverage. Some other agents might give you the snow and let you believe you can do it cause they want your business. I just had two shots of Tequila so I am just going to tell you the truth. The heck with kissing up to what you want to hear. I am just going give you what you need to hear.
You see, other investors are calculating in advantages such as being able to pay down the principal on the mortgage with the tenants rent money. That is not cash flow, but it does increase the investors net worth, --- with someone else's money!!.
Next. You mentioned appreciation. We have had the opposite of that from 2005 through 2011. Just as it was stoopid in 2005 to think that 25% appreciation was going to continue year after year, it strikes me as being nearly as dumb to think that prices will always go down, never increase. Forever.
If you have a five to ten year hold strategy, I believe that whatever you buy, house or duplex will be worth more in ten years than it is now, unless you allow the property to waste through deferred maintenance.
So what appreciates? just your 20%? NOOO the whole enchilada appreciates. You buy a house for $150,000 tomorrow it appreciates to $200,000 by the end of year ten (average 3.3% appreciation for the whole property works out to 16.5% annualized return on your $30,000) from appreciation alone.
No wonder smart investors are willing to buy houses with break even cash flow!
Add that 16.5% to the principal reduction off your mortgage and your total return is approaching 20% annually.
Refine your goal to a break even cash flow, or be prepared to either buy in the poorest zip codes. or increase your down pay to 30% - or listen to someone who just tells you what you'd like to hear.
Office 916-683-6695 or Cell: 916-896-9721.
DRE # 01912572
Lyon RE Elk Grove
9591 laguna Springs Drive
Elk Grove, Ca. 95758
What about Willow Creek?
$1500 for small 2 bedroom apartments is about 50% higher than one would expect. I don't know where to get tenants to pay that much for that small a place. 765 sq ft and 819 sq ft These units are vacant so the owner and listing agent can project any fantasy figure that they want. But no one believes them.
Maybe these units are super incredibly beautiful. But still,: $1500??? This isn't San Francisco.
FYI... Sacramento's inventory is very low, so when these units whether it is a duplex, triplex, etc. they go very fast. In fact, I had a client looking for a duplex and on day two had over 8 offers. Not to mention when we viewed the property, about 3 people came by asking if the place was already available to rent. It was amazing!
A good way to check Sacramento's rental comps are craigslist.com or rentometer.com!
If you have any questions, or need additional advice. Let me know.
Nancy S Bergman
Realtor - LSSC
DRE # 01893550
Lyon RE Downtown
2801 J Street
Sacramento, CA 95816
First thing you need to do is get with your Lender. (if you do not have one call Glenn Olsson 916-276-6236) They should be able to give you an accurate figure of what your monthly payment will be. (Everyone does not receive the same rate) Then your Realtor should be able to pull up the avg. rents for the area in which you are looking.
You just need to work wit a good team. Lender, Relator, Ins. agent and property manager if needed.
Hope this helps.
Sales/Mortgage Training and Assistance and Insurance
I think your analysis is correct, $1500 p/m is too high, and $800-$900 is probably more realistic. I have represented many investors the past few years, and they are doing extremely well with SFR, and one has a 4-plex that has done very well. In my opinion, if you are handy or have the funds to rehab a home that needs cosmetic repairs and some updating, this will be your best value. The Sacramento rental market is very vibrant right now, and I would be happy to talk to you about your investment goals. I can be reached at 916-996-4500 or TRBergen@comcast.net.
Fusion Real Estate
But I don't know if I want to go SFR or multi-unit. SFRs appreciate more, but you wont get cash flow every month with a 20% down. Multi-units like duplex do not appreciate much, but can give extra cash flow. I'd like some help.
The one I found above is a flip, so right off the bat, I am paying a premium. REOs might be better?