Sacramento rentals too competitive?

[Minka Sha]

I am trying to acquire a rental property for long term cash flow in Sacramento area but getting frustrated with all the cash buyers on rentals. I'm doing conventional loan. So far, I'm not having luck as my last two offers: 180k - seller took cash offer of 200k 300k - seller took cash offer Of 340k And same for two other properties. Two questions: What are some good areas for rentals in Sacramento area? I have been looking downtown/midtown/Tahoe park/North oak park. More importantly, I have heard I can help other investors by partnering with them instead of competing with them on deals. I have sizable cash down payment so I am open to that approach as well. Does anyone have any local contacts for this?

[Wes Blackwell]

@Ali Samee -- Great question! I actually used to live and work in the area, so here's my take:

The Arden-Arcade area of Sacramento is kind of a mixed bag... You can run the whole range from low income apartment complexes and rental all the way up to million dollar plus properties (that's high for Sacramento).

The good news is, you can kind of separate the area out by zip code.

95825 is on the most western side of the area, and contains lots and lots of large multifamily buildings and commercial properties. This is the area closest to the Arden Fair Mall and Sacramento State. Once you get a little further east towards Fulton Ave, that entire street is practically used car dealerships, especially north of Arden way all the way up to I-80.

Here you're going to get lots of millennial renters who are either going to Sac State or working their first jobs. Because of the lower incomes and increased foot traffic due to all the businesses, this is where you're going to find most of the crime for the area. The further you get away from Howe Avenue, generally the nicer it's going to be.

95864 is on the eastern side, starting at Fulton Ave and heading all the way over to the river. This is where you're going to find the higher priced properties, and lots of empty nesters who are approaching retirement, but in no means slowing down. Loehman's Plaza and Bandera's restaurant attract a lot of the affluent after work crowd, and that shopping center is currently undergoing a major renovation for lots of new business.  The properties in between Fulton and Watt are generally going to be fairly nice and most of the crime will stay over on the major streets. That's what you can probably consider to be the "heart" of Arden Manor.

95821 is somewhere in the middle of the two previous neighborhoods, and you're mostly going to find diverse young families with kids, half of them renting older townhouses and duplexes. But also people who are renting because they're close to retirement and don't have the funds to purchase. Most of the crime in this neighborhood is going to take place around Marconi avenue, especially as you get closer towards Fulton and I-80.

If crime is what worries you, I would recommend looking in either 95864 or 95821 and try to find a little pocket that's a couple streets back from the main roads like Marconi, Fulton, Howe or El Camino. If you stay south of El Camino and east of Morse you're pretty much golden. Best of luck!