Duplex Sales Data – As of August 15th, 2009

 

Duplexes Are Selling Fast – Lately….

For those of you that follow this blog, I’ve just put together the Comparable Sales Data for Citrus Heights, Rancho Cordova, Carmichael, Folsom, Fair Oaks, Orangevale, North Highlands and the Foothill Farms area of Sacramento County.

The Closed Sales section consists of Sales that have closed escrow on or after May 1, 2009.   I think you will notice that there has been a flurry of recent sales.  Time on the market has dropped.   I am posting this now so you can see what has been happening in the market within the last 2 or 3 months.

I will post later more statistics.   One of the problems in trying to analyze these properties, is the fact that many are vacant, so their incomes have to be “projected”.

Fix Up should be factored in.

Don’t forget that many of these duplexes, if they have gone back to the Bank, will need work because they have been neglected.l

The reason for the neglect is that many of these properties were sold at such a high price back in the “go-go” days, the investor had to take money out of pocket to maintain loan servicing and “defer” needed maintenance.   However, some of these properties were purchased by investors who had hoped to “flip” them and therefore did spend a lot of money with some new kitchens and bathrooms.  I’ve seen some of these where one unit would be rent ready with not too much more invested beyond new paint and carpet.

In other cases, well.. let’s just say they’ve got a lot of “deferred maintenance”.   Our experience has been that on just about any of these, you’ll need something in the neighborhood of $5,000 – $10,000 extra “per unit” to get these duplexes back into a decent condition.   This would be enough most of the time to have new carpet, paint… and some landscaping to enhance the curb appeal.

CLICK HERE FOR A COPY OF THE PDF FILE – COMPARABLE SALES AS OF 8-15-2009.

If you have any questions, please drop me a note at favinger@rwnetwork.com or call me at 916-203-1260.

 

Make it a great day…!!!

Getting Out Bid for the Duplex you want…?

I know what you thnk… “What’s the deal here…?”

According to my partner Carl Cooley, Broker, we’ve had about 4 months of increasing prices.   You know… I don’t know what to tell you except the following and you come to your own conclusion.

Last weekend I wrote.. I think 8 offers… Only one of that group was accepted and that was a short sale on a condo for about $45,000.00.

The other offers were for properties that I have posted on this site before.  On every occasion I was given the  usual “bring your highest and best offer” verbage from the listing agent.  I found out that several of these offers were “all cash” including the ones that I presented.

Folks.. you have to be careful here because I think the Banks are holding several more of these back, because they want to keep the prices up.

The economy in improving.. and yea I know we’ve got about 11% unemployement here in the Sacramento Area, but you see signs everywhere that it’s not “dead”.   Take a drive anywhere around this region and you are going to see construction sites working.

The Builders haven’t realy gotten back in the market here to build new inventory, although there are projects working.   So while we have some high unemployment numbers there is a lot of money looking for a home now.

Be carefull that you don’t get caught up in the frenzy because these things have to pencil out to make them attractive.  On just about every deal we do, I tell prospective Buyers to be prepared to invest another $10,000 to $20,000 in “fix ups and upgrades” to get the rents you’ll need.

Make it a great day

There is a lot of Competition for Bank Owned Duplexes….!

SO MAYBE YOU SHOULD “FISH WHERE THEY AIN’T”

“Fish where they ain’t” is a slogan I got from Ed Keller, another long time Real Estate Broker from one our Realty World offices in Amador County.   I have his link on my side bar if you want to check that area.

So with those words in mind I’ve been scouting out potential cash flow opportunities besides those that are Bank Owned/REO type of situations.

I came across two duplexes that are side by side on the corner of Gibbons and Walnut – 3852 through 3858 Walnut Avenue.  CLICK HERE FOR A CASH FLOW ANALYSIS

These properties have been on the market for over 90 days.  Rents vary from $700 to $900 per month.   I based my market analysis on $900 per month.  You can go and get a rent comparison to see that $900 is possible.

I think these could be a good deal if you can buy these right.   My cash flow figures were based upon sales prices of $200,000, but these should sell for a lower amount based upon the rents that they are getting now.

However when you are a landlord that prices your units below the market, you will then make it difficult to sell at top dollar, which I think is the case here.   But… these duplexes have a good location in my opinion.  They do need some curb appeal updates and probably will need some interior work as well to get that top dollar income.

In other words, since no one else is bidding on these as far as I know, maybe if you “fish where they ain’t” you might get a decent catch.

Make it a Great Day….

Bank Owned Four-Plex – Carmichael, Ca

BANK OWNED FOUR-PLEXES… ARE THEY A GOOD DEAL….?

If you have known me a while, you know I am not a big fan of Four-plexes in this area.

The reasons are as follows:

  • Most are flats – 2 units down and 2 units up
  • Most have no covered parking
  • No private patios or yards
  • No Firepaces
  • No Dishwashers
  • No Washer/Dryer Hookups – although they might have a coin-op Laundry Room
  • Located in a high density area of other rental units

However – Check this one out at 5720 Engle, Carmichael – These Four  Plexes  were built in the late 80’s.  They have just about all the amenities of a single family home or a duplex,  that are excluded in the list above.   Those missing amenities are pretty typical of most of the Four-Plexes in the Sacramento Region.

Click here for a Palm Treo video of the exterior taken this past Saturday, July 25th.  This property is located on the corner of Engle and Sareco Court.   If you go to google maps you can get the “street view” of this property.

You will notice in the slide show above that this is a nice area that is not all apartments another “plus”…!

Check My Ed’s Hot Picks Page – Investment Real Estate Deals..!

 

PRIDE OF OWNERSHIP TYPE INVESTMENT REAL ESTATE CAN CASH FLOW:

I’ve posted some new prospective Cash Flow opportunities to the Ed’s Hot Picks page that you might want to check out.

An Interesting Nine Units

One of them is a 9 unit property that I has been on the market for a long time and recently went into foreclosure so you’d better hurry.  

This property consists of two parcels.  A notice of default on one of them was filed in April and the other one just a few days ago, so the clock is ticking.  Call me for more information – 916-203-1260.

Financing if you need it will be an issue, especially on the 6 unit parcel.

A Duplex that could be owner occupied on one side.

The other property that was recently added is a duplex in a nice part of Citrus Heights, that is a 3 bedroom 2 bath on one side and a 2 bedroom 2 bathroom on the other.  The notice of default on this one was filed in April, so this one is getting down to the wire. 

As I have said in earlier posts…  I don’t always post these deals here, but if you check the Ed’s Hot Picks page I do update it a lot more often.

 

In the mean time…?

 

MAKE IT A GREAT DAY….

Roseville Four-Plexes – Got Some Ca$h Flow

July 14th – about 8:45 PM

 

Bread and Butter Four Plexes with Cash Flow Potential:

 

If you are a return visitor here you probably have not seen too many Four Plexes on this site that I have analyzed.  If this is your first time here because you are looking for an investment, I hope you find the information here useful and informative.

 

I may not post a daily entry to this blog here, but I will update this site at the ED’S HOT PICKS page frequently.   If you go there now you will find two potential Four Plexes listed under Roseville that I have provided Cash Flow analysis estimates.

 

I am very familiar with this area.   These Four-Plexes are what I call a Bread and Butter type investment… meaning they don’t have a lot of amenities such as central heat and air, individual laundry hook ups, fireplaces or sometimes even a dishwasher.

 

However, they are located in Roseville surrounded mostly by single family homes.

 

Both of the properties that I analyzed need some work on the curb appeal and the usual interior fix up.

 

If you are a long term investor and like to fix up properties and upgrade them, there have been other investors in the area that have done just that.  I’ve seen them add Central Air, upgrade landscaping and provide covered parking all of which does help to get a better quality tenant.

 

Bookmark this site and come back from time to time to see new postings on ED’S HOT PICKS

 

In the mean time…?

 

MAKE IT A GREAT DAY…!!!

The 1031 Tax Deferred Exchange is still around

 

Now’s the time to “Move Up”…? 

I got a Newsletter from Leonard Spoto of  Asset Exchange Company that I thought I’d share with you.

If you’d like more information regarding 1031 tax deferred exchanges, then check them out here and down load articles that will probably answer most of your questions. 

What follows is a part of their most recent “newsletter”.   I hope you find this useful and informative.

 

Trading Up in Today’s Market

 

Many of our clients are taking advantage of the turmoil in the real estate market by trading up. The theory is simple: a declining market favors investors who are trading up because the higher the property value, the greater the decline in real dollars assuming both properties are declining at the same rate.

 

There are also a lot more buyers who can come to the table with a 20% down payment on a $500K property than a $1MM property. Bernard P., a recent Asset Exchange Company client acquired his first commercial building after selling a $550K rental property in South San Francisco. Asked the motivation for his trade his answer was simple “there are great deals out there right now on the big stuff and we had plenty of interested buyers for our sale property. The time was right to trade up.”

 

Trading up with a 1031 Exchange also allows you to keep all of your money working for you. Taxes on the sale of an investment property can be as high as 1/3 of your total gain. But by entering into a 1031 Exchange before the close of escrow on the sale property, those taxes can be deferred (and possibly avoided altogether) allowing investors to get maximum value out of their real estate transactions.

 

 

 

Real Estate – An Hedge Against Inflation

 

Depending on which economist you read you may be inclined to believe that the US is headed towards an inflationary economy. The theory is that because the Fed and it’s counterparts around the world have been printing money to combat the global recession, inflation is a natural consequence. If you buy into this argument, you may want to consider investing in real estate as a hedge against inflation.

 

With real estate, if you have a low-rate, 30-year, fixed mortgage, your note will become a thing of beauty as prices rise:

 

– Your property value will rise

 

– Your rental income will rise

 

– Your mortgage payment will remain fixed

 

– You will repay the loan with cheaper dollars

 

There is plenty of disagreement, of course, among top economists regarding inflation. Some argue that with unemployment figures at a 26 year peak and plenty of idle factory space, rising prices in the near term is not a concern.

Real estate investors need to remember however, that a hedge against inflation is just one of the many benefits of investing in real estate.   Frequent readers of this newsletter will note that we often discuss the numerous tax advantages to owning real estate including:

 

– Ability to depreciate real estate hence reducing (or eliminating) your reportable taxable income from the property

 

– Ability to write off expenses

 

– The mortgage interest deduction

 

– The ability to sell real estate and either avoid and/or defer the payment of capital gains taxes

 

One thing for certain is that plenty of opportunistic investors are finding value in today’s real estate market.

 

 

Contact Leonard for more information regarding your 1031 exchange at Leonard_Spoto@mail.vresp.com and tell him Ed Favinger sent you.

 

 

Make it a great day…!

Some Interesting Deals If Cash Flow is Your Goal

June 17, 2009

Rancho Cordova – The Sleeper Area for Investors :

 

While out and about I came across a couple of what I call “suspects” that could be potential money makers.  I drove by both of these properties on June 15th and I think one of them has just been reported sold before I could post it here.

 

Check them out and you’ll see why I like these.  Click on the addresses for a couple of pictures and an attached “pro-forma” cash flow analysis.

  

10413 White Rock Road, Rancho Cordova – Great numbers only on the market a couple of days – Shows Pending sale as of today.

 

10754 56 Capana Rancho Cordova– Located in an area of Pride of Ownership single family homes on a large corner lot.  Click here for a VIDEO of the area around it.

 

One of these is what I call a “bread and butter” type investment and the other one is what I call a “coupon clipper”.

 

Let me ask you…   Are these numbers pretty decent…?   They include taxes, insurance, management, some repairs along with the water sewer and garbage.

 

I think the Sacramento area is the “place to invest”…  Am I wrong…?

 

Make it a great day…!

 

Is this still a Buyer’s Market…?

Not when you have multiple offers….

I plucked this story from the Sacramento Bee this morning and it just reinforces my view that the market has changed.  Click here:  Fewer homes listed this spring in Sacramento area.

However, when you read through the story the various sources talk about the inventory that is not out there right now.   We in the business call this the “Shadow Inventory”..   The Shadow Inventory are the real estate holdings that the banks have already foreclosed upon, hold title to,  but have not “released” for sale yet.

I know of several Duplexes that have been returned to the banks and are now what we call REO’s.  They have been in this status for over a month now.  Why are they waiting to put them back out there for sale…?  I don’t know.

In addition to the SacBee article.. I plucked out this article which didn’t have the Sacramento Region listed in this report.   RealtyTrac: April foreclosures rise 32 percent

Bottom line is that in addition to the upcoming heat wave this weekend, when you have 10-12 offers on a piece of real estate, that represents anechdotal evidence that the Seller is going to have a little more of an advantage.

This will be the status quo until the anticipated flood of new Bank Owned/REO properties finally hit the market here.

MAKE IT A GREAT DAY….

Fast Selling Duplexes – on Market Just Days…

Cash Flow Investments are going Fast..!

On May 7th I wrote about 3 duplexes that I thought were great deals.   If you missed my last post here are the 3 properties:

10414 South White Rock Road, Rancho Cordova, Ca 95670 – Pending Sale – On Market Just 6 days

6335 Sorrell Court, Citrus Heights, Ca 95621 – Pending Sale – On market Just 6 days

5006 Sunshine Lane, Sacramento, Ca 95841 –  Back in Escrow 4 days after I posted it on my Blog here.  This one still has a chance of falling through since it has already a couple of times.

If you are looking for a CASH FLOW investment…  Come back here again soon and I’ll some more information and prospects posted.

 

In the mean time…?

 

MAKE IT A GREAT DAY