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

 

 

 

 

 

Sacramento Duplexes For Sale – Not Much Inventory – Prices Up

Yea… There’s Not Much To Choose From, But,  Rents Are Up Too….

If you are curious about the market regarding Sacramento Duplexes for Sale, I’ve got some recent stats/graphs for you.   We’re still in a Seller’s Market and I think you’ll see the graphs below make the point.  I think they will also change a bit next month.

If you have ever read any of my past articles, I’ve always said  “A nice well maintained Duplex will sell for a pretty good price now with multiple offers”, or something to that effect.   The Duplexes that don’t sell quickly generally have these characteristics.

  • Poor or “Fair” Curb Appeal and General Appearance – Lack Pride of Ownership.
  • Rents that are lower or much lower than Market Rent.
  • Price is not reflective of the above 2 conditions.

Low Rents – Updates/Upgrades:

If you are thinking of Selling your Duplex or for that matter any kind of Rental Investment Property, you might think about upgrading/updating the property a little.

Having the same great tenants over several years time does not translate into a much better positive outcome in the sale if the rents they are paying are only about 1/2 of what the same unit would rent for today.

Generally if you aren’t keeping the rents up, you aren’t maintaining the property because you don’t have the cash flow.   Tenants know when they are getting a good deal.

However, if you are a buyer and make an offer on one of these types of properties I’m describing above, you’ll have to take into account the Updates/Upgrades you might be faced with to get the “higher rents” the Seller says you can get.

We recently were in escrow on a Rancho Cordova Duplex the Seller has owned for almost 30 years.   Both units were in need of work.   One of the units had 6  people living in a 2 bedroom 1 bath unit.   Both units were paying only $800.00 per month when the “market rate” is in the $1,300 to $1,400 range.

The deal fell through because the Buyer wanted an adjustment in the price to reflect the deferred maintenance and the low rents.   The buyer would have to get possession by giving a 60 day notice to terminate tenancy before being able to start the “rehab” process.  The unit would then be vacant for another 30 days at least.   There was too much to over come… Low Rents /Poor Condition/High Price.

Let me know what you think of these stats.

________________________________

NUMBER OF UNITS FOR SALE – SOLD- PENDING

Graphics list vs sold 6-10-19________________________________

LIST PRICE TO SALES PRICE RATIO – AVERAGE DAYS ON MARKET

List Price to Sales Price Ratio

________________________________

If you are thinking of Buying a Sacramento Duplex you want to take into account not only the condition, but the existing tenants and their current rent as well.   As long as you are aware of these issues, you’ll make a better informed decision on whether to go through the deal or not.

In the mean time…

Make it a Great Day…!

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

Related stories

Sacramento had state’s 2nd highest rent increase. But there’s good news for tenants too Sacbee.com

Thinking about moving to Sacramento…?  SFGATE.COM

 

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

 

Bread and Butter Sacramento Duplex for Sale

Your Basic Sacramento Duplex for Sale.

You’ve got to check out the Duplex for Sale at 7312-7314 Arleta Court in Sacramento we just listed a couple of days ago.

It’s on a nice Leafy green Cul-de-Sac location with other like kind duplexes.

CLICK HERE for a link to get Cash Flow Figures, Rental Survey and more pictures of the property and the surrounding street.

If this Sacramento Duplex interests you, please call or send a text to me at 916.203.1260.   You can also send an email to:   favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI, SFR, CDPE

 

Multi-Family Residential a Favorite for Investors

Late Cycle Real Estate Investing Strong

I thought I’d share an article from Bisnow.com.   You can subscribe I think for free and they will send you information to your inbox with Real Estate and other business news.

The reason I thought I’d share this is because many people I talk to,  including other Real Estate professionals, have the feeling the Real Estate Market is slowing down.Late cycle investing Bulls and Bears

However, the BisNow article points out the trends just before the great recession and the trends of today, especially when it comes to Multi-Family Residential,  are much different.

I share the optimism of the writer of the article because it applies to all residential income properties in this area at least, in my opinion.  Those types of properties include Single Family Homes, Duplexes, Four-Pelxes and Apartments.

They just can’t build enough units but they are trying.

Click here for the BisNow article.

Click here for a local Sacramento Business Journal Article regarding new construction of Apartments in the Region.

So if you’re on the fence about Investing in a Duplex, a Four-Plex, a Single Family Rental or an Apartment complex, please contact me today at 916.203.1260 or drop a note my way via email at: favinger@rwnetwork.com

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker

 

New Laws for 2019 – If You Are An Investor – Pay Attention

State of California Always Adding New Laws – Catch Up by Reading Below.

I receive an email newsletter from time to time from the BPE Law Group.   Every year we get a slew of new legislation out of the State.   You just have to keep up or you’ll be in trouble when it comes to owning Rental Real Estate.Desert road

I thought I’d share BPE’S most recent article with you.

I think you can sign up for their updates as well by emailing them at:

kbdunnagan@bpelaw.com.

 

CLICK HERE FOR A COPY OF THEIR MOST RECENT ARTICLE.

If you are looking for an Investment Property like a Duplex, a Four-plex, a small Apartment complex or even a Single Family home, please call or you can send a text to me at anytime at 916-203-1260.

We specialize in the Sales and Management of Sacramento Residential Investment Properties.

Make it a Great Day…

Ed Favinger, Broker, 916-203-1260   favinger@rwnetwork.com

 

 

Sacramento Duplexes For Sale – Bread & Butter Income Units

Rents are Low – But These Still Might Work…!

While there aren’t too many Sacramento Duplexes for sale on the market these days that I like a lot, there are some Duplexes I think might work out for the right investor.

These Duplexes for Sale are what I call “Bread and Butter” type of Investments.Hand writing the text: Rental Income

 

Take a peek at the information I have below here.   I’m profiling these Duplexes for Sale based upon their current situation and what I think the ultimate sale price should realistically end up being.

I will profile other Sacramento Duplexes later so come back here from time to time.

If you are looking for a Residential Income Investment like a Duplex or a Four Plex, please send an email to:  favinger@rwntwork.com or you can call me at anytime at 916.203.1260.

In the Mean Time…?

Make it a Great Day…!

Ed Favinger, Broker 

Folsom FourPlexes For Sale….!

These Four-Plexes For Sale in Folsom Are a Rare Occurrence

It not very often that we get a FourPlex for sale on the market here in Folsom but now there are two of them,  205 and 211 Talisman Drive, Folsom.

While they have a great location in a town with all the amenities you’d want close by in an Investment, there are some down sides to these properties.

Both of these FourPlexes have some deferred maintenance of between $12,000 – $15,000 as disclosed by the Pest Inspections provided by the listing broker.

 

Deferred maintenance is not an uncommon thing, but the other issue I discovered an investor is going to have to take into account is the rents can not be raised on most of these units until very late into 2020.

Click here for the rent roll and you’ll see what I’m talking about.  Only one unit that is currently vacant would be available to raise the rent to market.

Click here for a Rental Market Survey.   You can see rents are at a premium here in Folsom and it’s a sad thing the rental rates were locked in with leases expiring in 2020.

Click here for a Pro-forma Cash Flow Analysis for both Fourplexes

As you can see the Cash Flow is a bit skinny on these FourPlexes.   This is not uncommon in today’s market because  most of the time investors area able to increase the rents after close of escrow.  However in this situation, you’ll not be able to raise the rent for a long time.

Anyone who gets into escrow on these two FourPlexes will need to review the Seller’s documentation and Maintenance history carefully.   And again they will have to take into account rents will be locked in for a long time.

But hey… These are located in Folsom which is one of neatest towns in California.   There’s not much on the market now so if you are hot to buy a Folsom FourPlex…. this is what you can get now.

If you want more information about Residential Investment Properties like Duplexes and Four Plexes, call or text me at 916-203-1260 or drop a note my way via email at: favinger@rwnetwork.com.

We also do Property Management.

In the mean time…?

Make it a Great Day…!

Ed Favinger, Broker