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 looks 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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Sacramento Duplex Sales Update – Charts and Graphs Below

It’s a Seller’s Market -That’s The Bottom Line – See Below

 

I just ran the data and thought I’d share some of it with you.   If you have been looking for a Duplex for sale in the Sacramento area you know it’s been a little bit difficult.

Here’s an important Market Definition:   Buyer’s market: more than 6 months of inventory based on closed sales.  Seller’s market: less than 3 months of inventory based on closed sales.   Neutral market: 3 – 6 months of inventory based on closed sales

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Months of Inventory based on Closed Sales in June 2020: 1.4

      • Down 58.1% compared to last month
      • Down 17.9% compared to last year

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Duplexes For Sale in June 2020: 50 units.

      • Down 19.4% compared to last month
      • Down 25.4% compared to last year

Duplexes Closed in June 2020: 35 units.

      • Up 94.4% compared to last month
      • Down 12.5% compared to last year

Duplexes Placed under Contract in June 2020: 44 units.

      • Up 69.2% compared to last month
      • Down 2.2% compared to last year

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Finally… the graph below shows that List Prices are going down and Sales Prices are going up.

If you are a Duplex owner in the Sacramento Region and are thinking you might like to sell, I hope you come away with the idea it’s a Seller’s market.   To get an idea of what you might be able to sell for, send an email my way at:

Ed@EdFavinger.com or call/text me at 916.203.1260.

In the Mean Time…?

Make it a Great Day..!

 

Ed Favinger, Broker, CRS, GRI, SFR

Sacramento Duplex Market Update – Post Covid-19

Sacramento Duplexes in Good Condition are Selling – If Priced Right..!

 

That’s always the story isn’t it really in just about any market ?   Well maintained properties priced accordingly to the market conditions will always sell, many time with multiple offers.

Since the last update regarding sales data,  I did some follow up research to show you what sales have been like since the last post I submitted over a month ago.   Remember this is the sales data for the following zip codes: 95608, 95610, 95621, 95628, 95630, 95825, 95826, 95841, 95827.

The Sales Data from the May 12 post entry disclosed a List Price to Sales Price Ratio of 99.5%.  The information below that I’ll share shows the market still pretty warm and some properties with more than a couple of competing offers.

My Duplex sales Summary effective June 15, 2020 shows there’s a little bit of a price dip on some of the Duplexes for sale because as you’ll see the List Price to Sales Price Ratio is now at 97.7%.  This information is from closings occurring after May 7th up to June 15th.

You will notice however the Gross Rate Multi-plyer (GRM) has an average now of 12.81 for Sold/Closed Duplexes which is down from the 14 GRM for Active, Pending & Sold/Closed Transactions in the Summary from a month ago.

With fewer properties on the market we’ll see what happens in the next few weeks but I think you’re going to see an uptick in sales because we’ve got more pending now with the Average Days On Market down or the same for Pending and Closed Sales.

The Duplexes that are priced over the market or in poor condition you’ll see have a much higher Days On Market Average.

Rental Market is pretty good now too.   Units in good condition are renting up quickly at top dollar in spite of the Covid-19 situation here.

Bottom Line…?

If you are looking to purchase a Sacramento Duplex, give me a call at 916.203.1260.  Texts work too or you can send an email to me at Ed@EdFavinger.com.   We not only can help you in your purchase, but we also provide “2nd to none” Property Management as well.

If you are thinking of Selling a Duplex, I want to talk with you.   I can show you how to get the most out of your investment.

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR

 

Related Articles

 

    .

Don’t Forget Curb Appeal When Selling a Rental Duplex

First Impressions are Important to Investors & Tenants

I’ve been selling Real Estate Investment properties like Duplexes and Four-plexes in the Sacramento area now for almost 30 years.

It’s always amazing to me how many properties over the years I’ve seen that are on the market where you have junk, debris, non-operational vehicles in the driveway and the usual “over grown” grass/weeds.

Why is that important….?   Because the impression given is that the inside of the property will mirror pretty much what you see on the outside.

When You First Pull Up to a Property – First Impressions: 

If you’re an investor and looking at purchasing a property, do you think a prospective tenant will feel a potential pride of  where they might live if Curb Appeal is poor..?  Furthermore do you think they will want to pay you top dollar rent if the property looks unkempt?

From our Property Management experience the prospective tenant(s) will default to a position that the Owner/Landlord will probably not maintain the property if things go wrong if the Tenant was to make a repair service request.

Property Value is Affected:

In addition to the poor curb appeal when a tenant first pulls up to view it, think about the impact an unkempt yard would have on your neighbors.   For example, if  you currently live in a well maintained nice neighborhood of single family homes and all of a sudden you start see front yards of a few places standing out because they are over run with weeds and debris, increased property values will not be as great largely because of the poor neighborhood perception.

Guess what…? That standard works on Duplex or any other Residential Investment as well.

Call a Property Manager – Let Them Take Care Of it:

Just an FYI…?  A good Property Management company will have a list of preferred vendors to help maintain the property and even notify you if they see something out of place on their weekly route.

Real Estate is a long term deal for the most part, so fix up the front yard now because it will pay you back in higher rents, better quality tenants and higher return at Re-Sale.

Now, if you’re thinking of Selling or even Renting up a unit please call me at anytime at 916.203.1260 for more information about the current rental/sales market.

 

In the Mean Time…?

Make it a Great Day…

 

Related articles

Sacramento Duplex Market – Is It Dead…?

Duplex Market Is Active… Just Not As Much As it Was Before

Yes the Real State Market is a little slow but for those of you that are thinking of jumping into the Residential Income Property arena and thinking of buying a Sacramento Duplex,  I’m happy that you stopped by and took a minute to check this out.

It’s been a while since I’ve posted anything on this site but going forward I’ll be doing more and more here.

Effects of Rent Control and Covid-19

You may or may not be aware that we now have Statewide Rent Control from the passage of AB1482 last year which came into effect January 1, 2020.    Last year, the City of Sacramento also passed a Rent Control law that included a Rent Control board.

The result is they’ve capped the annual rent increase to no more than 5% + the local CPI which was 3.3%.   They also  included some tenant protections such as “just cause eviction” standards.

So we start things off the year with Rent Control and then the “Declaration – State of Emergency”.  All evictions were stopped until the end of the declaration.

Not only that, but in Sacramento County the courts aren’t going to start any court proceedings for evictions for at least 60 days after the declaration is lifted.

Some Sales Data to Look at.

In spite of the somewhat negative news above, I did a little research to show you what sales have been like.    I don’t see a lot of movement in price changes from List Price to Sales Price and I notice the Gross Rate Multi-plyer has an average of 14 for Active, Pending & Sold/Closed Transactions.

The Sales Data below is from March 15th until May 7th and includes the Zip Codes that I work primarily in which are: 95608, 95610, 95621, 95628, 95630, 95825, 95826, 95841, 95827    .

Total Active for sale now  –  25
Avg List Price    –  $498,238
Avg Days on Market     –        34
Avg Gross Rate Multi-plyer -14

Total Closed Sales       –          15
Avg List Price    –  $480,527
Avg Sales Price  –  $478,027
Avg Gross Rate Multi-plyer 14.2
Avg Days on Market           –  19
Avg # of Offers Per Duplex – 4.5

Total Pending Sales         6
Avg List Price     –   $427,983
Avg Days on Market        –     17
Avg Gross Rate Multi-plyer 14
Avg # of Offers Per Duplex  – 2

I’ll have another post in the next day or so regarding what to look for in the current market to get the most out of your investment.   Some of the inventory out there now is a little high given the amount of rent you’re able to receive if they have current tenants.

In the Mean Time…?

Make it a Great Day

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

 

 

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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