Cash Flow in Chico CA possible?

Question

Ok armed with my new(bie) real estate investing knowledge after devouring a lot of information on BiggerPockets, it’s time for me to figure out where I will begin my real estate investment career.  I already know that I’m a buy and hold investor and looking to supplement my retirement income as part of my investment portfolio.  Plan on retiring in about 7-10 years.   So now it’s really a question of what will be my niche market and location.   I’m leaning towards a college town/area within California that is within 3-5 hours from the bay area but with a focus on SFRs not the student market. May consider students but not sure this is the way to go. It would also be good if it was in a place I would eventually like to retire to as well.

So this brings to mind Chico. Really like Chico area and a lot of Butte County. Interested in those knowledgeable in the area (realtors, property managers, contractors) if there is a market that allows for buy and hold investing with modest cash flow.  Doing some quick number running using the 50% rule I could not find many houses on Redfin, Realtor or Zillow that would allow for positive cash flow. Many where negative.  I realize I'm using retail value and not intrinsic value but it still seems like a difficult market even here where house values are low compared to where I live in the bay area.

So is buy and hold cash flow investing something that works in the Chico area?

How hard is it to purchase houses here at intrinsic versus retail value ie ease at finding deals...?

If so, I would love to connect with real estate agents and property managers that work and live in the area.  If this is a good place to invest I will make the effort to visit Chico and get to know the neighborhoods and real estate market.

Thanks,

Drew

Keith Fickert · Answer

@Chelsea Thibeau

I also use Blue Oak. They’ve been pretty reliable for us.

Stephanie Gulbronson · Answer

@Chelsea Thibeau

Blue Oak Property Management in Chico is great

Stephanie Gulbronson · Answer

@Chelsea Thibeau Are there any short term vacation rental managers you would recommend in Chico?

Chelsea Parisio · Answer

My husband and I own two properties in Chico, with 4 doors. We rent the nice downtown units on Airbnb, and the larger farmhouse and MIL to longterm tenants. We've seen a lot of student rentals come up for sale (on Warner for example), but I'm not sure I'm interested in renting to students. I would love a referral to a great Property Management company though!

How does Oroville look for investing? I've been visiting friends in Oroville lately and the downtown is adorable - there are some beautiful homes there! Theres just such a stigma associated, I don't know if it's deserved or not.

Scott Wolf · Answer

Jonathan, I agree with what you say about trying to make the numbers work in Chico. I have been buying in other markets, though I live in Chico, for that very reason.

One other thought about student rentals: There are some landlords who actually fix student rentals up super nice and essentially sell the parents on them when parents come to town with their student to help them find a place to live. They also charge an extraordinary amount for rent, but they get it because of what the parents want for their child. (The Campos family properties are a good example of this.)

Dylan Vargas · Answer

@Chelsea Thibeau Welcome! @Ashley Hernandez does property management as well and a personal touch. Be careful with the student rentals at this moment as the CSU system is online for this Fall semester. Not saying student investing will not work just be cautious and research what is going on here in Chico with regard to Covid 19 and student housing.

As far as Oroville I have a 5 unit there. I love the area and downtown but man, it has a LONG way to go. Maybe now is the time to get in but dont be fooled for a second. My tenants are great and many neighbors are as well but block by block can be a drastic change. Real bad actors around Oroville. The area has so much to offer such as the downtown, Lineman School, the river actually is right in town, water front park etc. Just a massive homeless, crime and drug problem. I hope it changes and I am doing my part. Lots of new property owners/ investors so maybe this will turn things around. Tons of potential but........Good luck and keep us posted.

Lance Hulsey · Answer

@Chelsea Thibeau our office has an agent who does short term vacation rentals management. It is called bnbsitter santa cruz. Dm me for more info.

Chelsea Parisio · Answer

Unfortunately I was never able to find one. I had a friend manage my space as a co-host when I lived out of state for a year, but I was unable to find a pro outfit. The demands of STR's are specialized and require a level of management beyond mid/long term. I know there are small companies in the Bay Area/ Santa Cruz who manage for folks. If someone were to start such a service in Chico I know they'd be kept busy!

Dylan Mull · Answer

@Chelsea Thibeau

My friend Wyatt Dickinson at hignell property management is great! And I understand you being weary of Oroville because of its stigma but I’ve heard that there is a lot of reinvesting going on in that community right now. The owner of tong fong low is trying to bring the downtown area back to life

Todd Harrington · Answer

Ive lived in  Chico for 2 years and my cousin has been here for a decade. I wouldn't invest in Chico unless you want to deal with students. Not much of SFH environment from what I've seen. However, I could definitely be wrong and your post is older. If this worked for you please let me know

Cash Flow in Chico CA possible?

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