Sacramento Duplexes for Sale – A Hot Market – But Short Sighted Sellers

Amazing How Overlooked Curb Appeal is When Selling In Today’s Market.

 

Here are 4 Sacramento Duplexes for sale that I’m going to profile because I’m actively looking to help investors find a decent deal in today’s market.   We do have Rent Control but,  with low interest rates available now, if you have a property that is priced right with rents at or near market, Investors are out there ready to buy.

So while I’m out previewing the available inventory I drove by these properties and in my opinion it’s a “turn off” when an investor pulls up to a property to see dirt in the front with not a bit of landscaping.

Here’s the list and my comments.   Let me know what you think.

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8919 Montoya, Sacramento – 3 bedrooms 2 bath on each side.   It’s sad that while they have a couple of nice specimen Eucalyptus trees, they are just surrounded by dirt that could have easily been a nice cool green lawn.

Nice looking landscaping I think gives the tenants more pride in where they live and having a lush green lawn surrounding these trees would have been simple and easy.   Doing that might also help mitigate and help sell given the fact this Duplex backs up to Highway 50 which might be an objection to some investors

Priced at $465,000Income is $36,000 one unit at $1,800 and one at $1,200.

Click Here for a Rental Survey of this property.

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9104 Nasreen Drive, Sacramento – 2 bedrooms 1 bath each side – Click here for a short video of the vacant side.   it would not take too much to fix this side up.  It would be worth it because of the location in an area of single family homes.   It’s basically an “eyesore” along with the one across the street and this lack of attention brings down the value of the neighborhood. It’s Priced at $415,000.

The rent is only at $850.00 per month for the occupied side and given the condition of the vacant side shown in the video needing work and updates,  you have to wonder about price.   There is an opportunity here but the price should be reduced to make a fair deal for a buyer.

By the way… Click Here for a Rent Survey to see how much was left on table.   The Seller should have raised the rents long ago which would have helped defray the improvement costs to the exterior.

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3416-18 Viking Drive, Sacramento, 2 bedrooms 2 bath and a 2 bedrooms 1 bath configuration.  Absolutely no curb appeal in my opinion.   It’s too bad there’s so much potential here because it sits on a corner lot with some mature trees that need some landscape enhancement and done right would have made this property really stand out.

However, they did some interior remodel of the 2 bedroom 2 bath side – Click here for a quick video tour of the exterior and see the explanation of what I would have done.

Priced at $439,000  Click Here for a Rent Survey

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10996-10998 Hirschfeld Way, Rancho Cordova – 2 bedrooms 2 bath 2 car garage and a 2 bedroom 1 bath 1 car garage.

It’s amazing to me this is the only one of the 4 properties I’m profiling here with some curb appeal.   Guess what…? They have the highest income with existing tenants in place.    Priced at $460,000 the income now is $36,900, with the 2 Bed/2 ba unit @ $1,575 and the 2 Bed/1 ba unit @ $1,500 per month.

Click Here for a Rent Survey    It appears their rents are right at market from that survey.

 

Finally – In conclusion if you are thinking of Selling a Duplex, don’t forget the curb appeal when putting it on the market.  You should also make it a part of the maintenance expense because it will payoff in the long run.

 

In the Mean Time…?

Make it a Great Day…

Ed Favinger, Broker CRS, GRI, SFR

 

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Tenants Have to Follow the Rules or a Termination of Tenancy Could Occur

When Given a Notice to Enter to Make Repairs… Be Available

We recently had the occasion of having to serve a tenant on more than one occasion to allow a Plumbing company entry into his unit to make a repair on a water leak that the tenant originally called in.

The plumbing company made more than a few attempts to get into the unit, but the tenant was never fully cooperative. Plumbing companies and other vendors we use can not always make an “on time” appointment. They will do their best but a lot of times they will have a “window” of time.   For example, “well be there between 9-11”.

Personally I agree with the tenant that if they use a window, it means they have to be there a 9 but the vendor may not show up until 10:30.  However,  that is the environment we live in and while it’s sometimes inconvenient we have to get the repair completed.

When the tenant stood us up again, we gave him a 48 hour notice to enter.

On the day we were supposed to enter, we get there with a copy of the keys just in case the tenant wasn’t home which,  in this case he wasn’t,  although he said he would be.

Here’s a list of the violations of his lease.

  • The Keys We Had Don’t Work – Tenant Changed the Locks
    If you didn’t know, as a Tenant you are allowed to change the locks on your door, BUT, you have to give a copy of those new keys to the Property Manager/Landlord in case they need access,  as was this case. Since the tenant wasn’t there and would not be available, we had to drill out the key and replace the lock.
  • The Tenant had “unauthorized” pets in his unit !
    After we get into the unit we find the tenant has dogs that he never told us about and was not authorized to have.
 So What Can Happen To a Tenant in a Case Like This..? 

The Tenant is going to be given a bill for the replacement of the lock since he didn’t give us a copy.  He also had dogs and never told us or got authorization so he getting a Termination Notice.

The new Statewide Rent Control Law does not come into effect until January 1, 2020, so his “termination of tenancy” doesn’t require any reason for the termination.   This was a tool that made it easier for Landlords to get rid of Tenants who don’t follow the rules.

So the advice I’d give you if you going to be a renter is, please follow the rules.   Most property managers don’t like kicking people out of their homes, but if you don’t follow the rules that is what could happen to you.

If you are an Owner/Investor looking for Property Management Services, please check us out at Haven Properties, Property Management Services 2nd to None.

 

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR

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Sacramento Four Plex For Sale But Income is Way Too Low

This Sacramento Four Plex for Sale has a List Price of $580,000, 16.11x’s Gross Rents.

Folks, now that we have Rent Control for the most part effective on Jan. 1, 2020 I’m seeing a few listings coming up like the one pictured at 5743 Blachly, Sacramento.   There are some issues any Investor in the market now should be aware of if they plan on making money on this property.  Sadly there are others out there just like this one.

I’ve always been told to “keep the rents at Market” at all times, because you’ll have the cash flow for reserves and repairs when needed.   When it’s time to sell, you’ll get your asking price with not many issues like the one you’ll encounter below.

This owner has the monthly rents almost $300 each unit below market or translated annually to be about $14,000 in missed income.

The Rents shown on the listing for each 2 bedroom 1 bath unit @$750 per month, with a Gross Annual Income of only $36,000.00, when it should be about $50,000.

Our Property Management Company, Haven Properties currently manage 2 Four-plex Apartment buildings in the immediate area on Keoncrest Circle.   The Average Rents for the same unit configuration as the one pictured are Blachly$1,045 and we even have one at $1,200.

HOW TO GET TO MARKET RENT… ?

The obvious solution for any Investor in this transaction is to raise the rents to the Market Rent for the area to make the deal work.   The only other option would be for the Seller to bring the price down to reflect the value of the existing rents which I’m sure is not an option the Seller has considered.

If you keep the current tenants you can’t raise the rents higher than the Rent Cap that’s part of the Rent Control Law.  The Rent Cap is currently 5% plus the rate of inflation for the area which is about 3%.

However the “work around” would be that either the Seller gives the existing tenants a termination now prior to January 1, 2020 or the Buyer does it when they close the deal,  hopefully before the end of the year.

However the Buyer is going to have some “turn over” expenses.  Those are the only two options I can think of because after January 1, 2020, Just Cause Eviction comes into play.

It makes a little tougher to sell now doesn’t it…?

The lessons learned are a few more hassles and roadblocks that could have been avoided if the owner kept the Rents at Market.   To see what I am talking about…?

Which one looks better…?

 

Think it over and in the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR 916-203-1260

 

Related Articles

Daly City Landlords Line Up To Evict Tenants Ahead of New State Law  SFist.com

Los Angeles City Council moves forward with eviction, rent increase moratoriums LA Times

 

More Rent Control – Now You Must Accept Section 8 Vouchers…?

If you are a Landlord, You Should Pay Attention

With the recent passage of the Statewide Rent Control Act, (AB1482) another recent piece of legislation, SB329 was also recently signed into law by the Governor.

Click here for the notice we got from the California Apartment Association.

Be sure and read the last line of the of the article.

You can be sure because of the ongoing housing crisis that governments are going to be placing more of the burden on Landlords and Investors.

They will be forced to become more of a player/participant as part of the so called “social safety net” the legislators will foist on Landlords/Investors because of their inaction.

While I still believe you can make money in Residential Investment Real Estate if you are not participating to help elect political leaders who understand the problem, more regulations and laws might come into being that you don’t like.

Get your checkbook out and be ready to support the efforts of the California Apartment Association and other groups that are in favor of building more housing and not restricting growth.   If you don’t help get people elected who are committed to increasing the housing supply, it’s only going to get worse for everyone, Owners/Landlords/Tenants and First Time Home Buyers.

Is this the California you want to live in…?

I’d like your comments….

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR    916.203.1260

Related Articles

L.A. City Council Moves to Stop Landlords’ Rent Hikes, No-Fault Evictions Ahead of New State Rules

 

Sacramento Rent Control is here & Statewide – What Are the Rules..?

California Apartment Association Has an Overview

 

Well it’s sad to say, but we’ve entered the area of State Wide Rent Control with the recent passage of AB1482 that was signed into law a couple of days ago by the Governor.

While this law could have been worse, it’s still takes away many protections for Landlords/Investors because they will not be able to easily raise rents to market rates or evict tenants that might pay the rent, but are disruptive to an apartment complex or not following the rules regarding care of their unit.

The real problem is the lack of affordable housing that is caused by the ever increasing regulations and barriers put up by governments, state and local.

I guess one good thing is there is no “enforcement mechanism” in place with this new State law, such as a “rent control board” that was created by the City of Sacramento.  By the way, that Rent Control Board will be funded by Landlords with another Annual Assessment.   So if a tenant has a dispute with you and at the same time owes rent to a Landlord, that tenant can easily get a Rent Control committee to hold a hearing delaying any kind of enforcement.

The rules, procedures and assessment amounts from the City of Sacramento Rent Control Board haven’t been published as far as I know.   So stay tuned and if you’re thinking of buying an investment property there or anywhere else in the State of California, you’ve got to be aware of the new law’s impacts.

You can still make money with investment real estate, but you’ll have to learn the new rules.

Managing a rental will probably be made a little more time consuming so why not hire a Property Manager.   A good one will help make you money and keep you out of trouble.

Check us out at Haven Properties, 916.990.0770 or call me anytime at 916.203.1260 if you have questions regarding Rent Control, the Rental Market or Residential Investment Sales.

Click Here for the INDUSTRY INSIGHTS prepared by the California Apartment Association.

 

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR   916.203.1260

 

 

Rent Control Is Here in Sacramento & Soon Statewide

Get Your Rents Up To Market Now Before January 1, 2020 Because Rent Control is Here.

 

The State of California it looks like is about ready to implement a Statewide Rent Control Law that recently passed both house of the State Legislature and headed to Gavin Newsom’s desk.

According to the Sacramento Bee Article I have here for you, it won’t become law until 1/1/2020.

If you have not raised the rent in a long time my suggestion is to do it now and get it close enough to the current market rent as you can because after the 1st of the year you will be limited in what you can do.

In addition, the more onerous “just cause” eviction will now be a factor in cleaning up a property that needs to rid itself of uncooperative tenants that maybe laying waste to the property and intimidating neighbors.   In the past with situations like this, we’d only have to give a 30 or 60 day “termination of tenancy” notice which had no defense.  It could be for any reason at all.

We rarely ever used that tool, but it did come in handy when we had situations that our Property Management Company encountered from time to time.

CLICK HERE FOR THE SACRAMENTO BEE ARTICLE DATED  SEPTEMBER 12, 2019 09:48 AM 

Now if you think Rent Control is going to help, it’s not.  The people it’s meant to help won’t get it.

Related Articles

CALIFORNIA LEGISLATORS MADE A MESS OUT OF RENT CONTROL. THEY JUST DON’T KNOW IT YET | OPINION – Newsweek, Sept. 13, 2019

California embraces failed rent-control policies at the statewide level – Washington Examiner, Sept. 12, 2019

If you have more questions, please contact me at 916.203.1260 or drop a note at favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Duplex Market Still Strong – Low Inventory – Prices Continue Up

Even Fixers Get Multiple Offers..! Just Not Top Dollar..!

I haven’t written an article in a while and thought I’d get back in here and update those of you that follow this blog from time to time

RE-SALE SACRAMENTO AREA DUPLEXES

Duplex sales in the Sacramento Region are still pretty healthy with rising prices and rising rents because of a Strong Economy.

Mistakes I See Sellers Make:

The biggest mistake I see some Duplex Sellers now on the market, is thinking an “as is” sale of a property that has a lot of “deferred maintenance” will sell for just about what a “Fixed Up” property will bring in.Duplexes - 1

Another mistake,  besides not maintaining the property, would be an existing unit Rents far below the market.  The reason usually given is “they are long term tenants”.  This reason ignores the fact when they go to Sell the Duplex, a new owner is going to have to deal with tenants receiving large rent increases.

Why to Avoid Those Mistakes:

Because they haven’t raised the rents during the long term tenancies, these tenants know they have a good deal and never report much in the way of needed repairs and since they always pay the rent on time,  the Seller hasn’t been by the property or maintained it unless it was an emergency.

Because the rents were so low, there was no incentive for the owner to make any upgrades to or any effort to enhance/upgrade.   Most of the time they only made repairs after a complaint.

Example of what I’m talking about:

I’m in escrow now on a Fair Oaks duplex where the HVAC unit will have to be repaired to the tune of $2,000 because the unit hasn’t been serviced in years.  What’s more… Even with this fix, there’s no guarantee and the contractor said you’d be better off getting a new unit.  Had it been maintained and serviced on a regular basis, the unit would have had more potential life and not become an issue in the Sale Escrow.

So the Bottom Line…? 

Prices are going up for sure and if you want top dollar for your investment, you should take an honest look at it and if repairs/upgrades are warranted, do them.  When you then raise the rent, you’ll see most tenants will put up with it because you have maintained it and they are proud to live there.

When you have maintained the Property and maintained Rents at Current Market, you are using the “prudent investor standards”.

By the way… Have you heard Interest Rates are coming down….?

If you’re thinking of Selling or Investing in the area, please give me a call at 916.203.1260.   I’ll actually answer the phone.. Texts will work also.

In the Mean Time…?

Make it a Great Day…!

 

Related stories

City of Sacramento Adopts Rent Control Ordinance BPE Law Group Blog

 

 

 

 

 

High Costs of Rent in Sacramento Turns Renters into Home Buyers

Old News To Us in Real Estate.

There have been several articles all over the print and social media about the rising rental rates here in the Sacramento Region.   It was only a matter of time before Renters would turn into Home Buyers because it’s cheaper.

Our Property Management Company with approximately 400 total units of various configurations has only 7 current vacancies with, we think,  another 7 coming up within the next 30 days or so.Hand writing the text: Buying a Home

So it’s no surprise to those of us who work in the field everyday when we hear another news report about the market.

So after listening to the morning news on KFBK I got another news story from KCRA Channel 3 talking about the same thing.

Millennials are beginning to buy homes because Rents are so high here they’ve now begun to figure out it’s a better deal to Buy and own.

I’ve noticed that a lot of the Sacramento Duplexes being financed by FHA loans which are only given to Owner Occupied Buyers.. another trend in my opinion.   I’ve written before about buying a Duplex to live in one side and rent the other.  No surprise to me of late seeing more people do just that.

If you are currently a renter and would like to be a Home Owner, contact me today and I’ll get you started on your way.

In the Mean Time…?

Make it a Great Day….!

Ed Favinger, Broker, CRS, GRI, SFR     favinger@rwnetwork.com  916.203.1260

Related Articles:

This is the Number 1 obstacle keeping people from buying a home CNBC

Sacramento Duplexes for Sale – Check Them Out Today…!

These Two are “Bread & Butter” Type Sacramento Duplexes for Sale.

 

We’ve just listed two Duplexes for sale and I thought I’d post their links here.

4909-4911 Douvan Court, Carmichael, Ca – 2 bedroom 1 bath each side with Central Heat & Air.   Great Location near schools, shopping and work centers.  Priced at $349,950.   CLICK HERE FOR MORE INFORMATION

7312-7314 Arleta Court, Sacramento, Ca – 2 bedroom 1 bath each side with Central Heat and Air.  Community Park just down the street – local schools close by and easy access to Hwy 99 commute corridor.  Priced at $369,999.   CLICK HERE FOR MORE INFORMATION.

If you are looking for a Sacramento Duplex to buy then contact me today and I’ll help find the right investment for you.

You’d like to buy but you live out of the area…?   We also offer Property Management 2nd to None.

Call me today… I’ll answer all of your questions about the Sacramento Duplex market and what kind of rents you can bring in.

In the Mean Time…?

Make it a Great Day…

Ed Favinger, Broker, CRS, GRI, SFR

Related Articles:

Single Family Rents Rise – RISMEDIA.COM 4-17-19

3 Things to Consider Before Investing in a Rental Property – RealtyTimes.com 4-11-19

 

How’s the Real Estate Market…?

Foreclosures At a 20 Year Low

I get this question all the time from people asking me “how is the real estate market?”.

The short answer is, Great…!

I have some links below that will give you some insight but in the greater Sacramento Area I think it’s one of the best I’ve seen.   Why do I say that…?

Have you tried to get a contractor or handyman to fix something at a rental…?  When you’ve got contractors busy with a back log of weeks out, that’s probably one of the best signs of a great real estate market.

 

Click Here for an article regards the low Foreclosure Rate.

And if you’re an investor curious about rents, click here for that article.

Aerial shot of Folsom, California with Folsom Lake in background.

Aerial shot of Folsom, California with Folsom Lake in background.

If you’re thinking of getting into the market for a new home or you are an investor looking to purchase your first rental property or you want to add to your portfolio, please call/text or email me at anytime.

 

Looking for a Duplex to buy…?   I’ve got one that you should take a peek at.   Click Here for the information on this Bread and Butter Property waiting for you.

 

 

In the Mean Time…?  Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR    916.203.1260   favinger@rwnetwork.com