What Drives Cash Flow in the Sacramento Region’s Real Estate Market..?

“It is all about jobs”

I was asked by a Bay Area Real Estate Investor yesterday while we were touring the area looking at Duplexes for sale.  He and his wife had a concern about the possibility of rents increasing along with property values.    That tour included properties in Folsom, Citrus Heights, Carmichael and Sacramento.   So as we were driving, my answer was, “it’s all about jobs”.

I told him as the  job market and the overall economy gets better,  there will be upward pressure on rents because building of new units had come to a standstill.   We’re just now starting to add more homes in the market.

English: A photo of the theater sign at the Su...

Lo and Behold…..! There’s an interesting article in today’s Sacramento Bee’s Business section that is going to be a 3 part series about this area.

Check it out, because if you live in the Bay Area and want to invest in the Sacramento Real Estate market, this short article will give you some idea of what is going and contemplated in the area.

What will redefine us..?  Local leaders offer ideas.  SacBee 8-17-14

Let me know what you think of the article and you might want to check back for their updates.

Now, if you have any questions regarding the Sacramento Region’s Real Estate Investment opportunities, please contact me at anytime.

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE     916-203-1260    favinger@rwnetwork.com

 

Another Article about Folsom…And Some Recent Sales Stats Too…

From the Sacramento Bee – Real Estate Section – August 2, 2014

I thought I’d pass this on in case you don’t get the Sacramento Bee.   As a 25 year resident of Folsom, I can tell you that this is old news but it’s nice to read about your town.    Take a look at the article below.

Schools get high marks from residents

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Below is some recent Sales Data that I think you might find interesting.

Folsom Real Estate Sales Data

Average Listing Price (last 12 months)

AVERAGE LIST PRICE IN JULY

Single Family Homes    $517,478       Condos/Townhomes    $250,659     Multi­family  Homes   $694,667

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Folsom Real Estate Sales Data

Days on Market (last 12 months)

CURRENT AVERAGE DAYS ON MARKET IN MAY

Single Family Homes  -  90,   Condos/Townhomes – 92,      Multi-family Homes –  86

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker CRS, GRI, SFR, CDPE    916-203-1260   favinger@rwnetwork.com

My Review of a Sacramento Bank Owned Four-Plex & a Rancho Cordova Duplex.

The Four Plex is Bank Owned/REO & the Duplex is a normal “equity” sale.

While the market is still pretty decent,  we are not getting the “multiple” offers as often as we did earlier.    I think one of the reasons is the condition of some of the new inventory coming up for sale.  They are asking top dollar but their condition is not at the quality to match their asking price.   I have two examples below.

The Four Plex located at 801 Carro, Sacramento is in pretty sad shape.    Take a peek at the video below.   I did not go into all the units and probably should have.   These four-plexes are a little different than the usual 4 plexes because most of these are configured as 2 bedroom 1 bath units.  However when I got back to the office I noticed on the MLS listing print out that there must have been some changes made because the listing shows a 3 bedroom 1 bath unit in the mix along with a 1 bedroom 1 bath unit.

I’ll have to verify this and update this blog post later.  The reason is because I have been involved in the sales of these types of four-plexes before and they are all 2 bedroom 1 bath units.

Click Here for the “proforma” cash flow analysis I prepared based upon the asking price of “sales price” + Fix Up costs I estimate at $10,000 per unit.  I think the closing price has to come down some because on any REO deal such as this one, there’s always something you miss or that comes up unexpectedly when you are doing a rehab.

https://www.youtube.com/watch?v=wsTKd0FFW2k

The Duplex is located at 2647-2649  Mcgregor Dr, Rancho Cordova.    It’s listed at $209,500 that includes a 2 bedroom 1 bath unit and a 2 bedroom 2 bath unit.   Both have 1 car garages.   Both units are rented under market in my opinion, which my cash flow analysis below reflects.

By the way….I think Rancho Cordova  is the “sleeper” investment area of the Sacramento Region.   The city has made an all out effort to clean up the Folsom Blvd corridor and it shows.    This property by the way, is within a short walk to the Light Rail station and the  Zinfandel Shopping Square which include a Grocery outlet, fast food and some shopping.  Access to Hwy 50 and the Sunrise Corridor is right there as well.

I was a little disappointed when I previewed it.   The lawn hadn’t been taken care of and when I tested the front yard sprinkler system on the vacant unit there was a broken sprinkler head gushing out water.

Anyway, Click Here for the “proforma” cash flow analysis and you can catch a quick video of one side below.

Let me know what you think.

In the mean time….?

Make it a Great Day..!

Ed Favinger, Broker CRS, GRI, SFR, CDPE       favinger@rwnetwork.com   916-203-1260

Latest Folsom Real Estate Statistics – 2nd Quarter 2014…!!!

 Some interesting numbers here…

I thought I’d post the information from Trengraphix Inc. for your review.  From what I can see here,  it looks like anything over about $500,000 is taking a little longer to sell.

This information is for Single Family Homes only.

The graph below shows the Average Price Per Sq. Ft.,  which looks like it’s holding steady now north of $200 per sq. ft.

TGChartImage

 

The Graph Below shows the “for sale” and “solds”… You’ll notice the Closed Sales are below that $500, 000 threshold.

TGChartImage (3)

The following graph shows the “Average Days On Market” and the List Price/Sales Price Ratio.  

TGChartImage (2)

 

If you want more information about the market you can always send me a note at favinger@rwnetwork.com.

In the Mean Time…?

Make it a Great Day..!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE         916-203-1260     favinger@rwnetwork.com