Realistic expectations for a deal in Sacramento?!

[Tyler Haskell]

Hello everyone,

I was hoping for some advice on where to begin in realistic expectations for the Sacramento area. Clearly the 2% and 50% rule are tough to find in CA and even Sacramento, so in order to not turn EVERY property away, I need to know what I CAN find that is a good deal.

Given that 25% down on a 200,000 SFH in Sacramento would exhaust all of my investment capital, is this the smart place to put my money? Especially when the 2% rule is more like the .8 - 1% rule here, and that is considered good?

Is it wise to put all of my current investment capital into a property that will yield neutral cash flow assuming I buy right and can keep it occupied without lapse? 

The upside to that risk is that I would be banking on appreciation and later increasing rents, and after all that sounds better then sitting on my money for 5 years until the next market cycle. But that can also be dangerous. 

I would love to do multi family in Sacramento but those seem even more difficult to find, not to mention that I would have to raise additional money to get one. 

Given that others seem to be having problems finding deals in this area also (just my view of things from the forums), out of state investing towards the middle of the country seems very appealing, especially when I see people talking about 25K a unit. But as a noobie out of state seems a bit daunting and an easy way to get into trouble.

In all fairness I have not established a relationship with many brokers or wholesalers in the area, nor have I established a good network yet, so I cannot give up before I really even begin right!

I am simply looking for guidance on where to start directing my efforts and training my brain given the economic landscape. Thanks for any advice you can give me!

Tyler Haskell

[Chris Vail]

Hello @Tyler Haskell ,

To answer your question simply would be this... You will have to decide what your expectations will be, as no one will (or should) be able to state what your standard should be. Now that being said I can give you what I am currently looking for in Sacramento, which is a SFH investment where I am making at a minimum of 7% return on the cash I have invested. Have I found it yet, no, but I contiune to look and will continue to do so.

I am speaking from someone that was asking the same questions 4 months ago and realized at the end of the day it didn't matter what was a good deal to someone else if it wasn't a good deal in my eyes then its an investment I shouldn't make regardless of what someone else is saying. Might be time to really look at what you want to get out of a REI and ask your self "What would you be happy with?" If you can answer that question truthfully to your self then you will know what your criteria for an investment will be. And remember this is a marathon, not a sprint.