Central Valley - anyone?

[Jak Dadi]

Hello All,

After making a few investments in East Bay last year and managing them personally this year, I am now ready to make some more investments, preferably outside of the Bay Area for diversification purposes (Japan earthquake is fresh in my mind too). Markets been looked into are Fresno/Clovis, Merced, Stockton and Sacramento. Any other suggestions are welcome. I will hire a property management firm to manage these off-site units. The only thing is I do not know much about the markets except for the research done online. Is there anyone out there who has been actively investing in 4plexes in these markets. For me, the story has to be about cash flow, where breakeven is from 2 units and the other 2 units contribute to positive cash flow. I have a few Section 8 tenants in my existing properties, and it works out perfectly.

I am looking for 4 plexes in clean areas (i.e no gang activity) for ~$140K- $150K financed deals, 2 bed units, approx $700/mo in rent. Not looking for rehab units since I do not have expertise in rehabbing.

A search in the BP Forums did not yield much info so I am assuming that there are not many members who are investing actively in these markets, but I may be completely wrong.

I understand that the above locations have been really hard hit in the meltdown. My realtor recommends I look at properties closer to home in South Bay, but the cap rates are not what I am looking for. I try and limit my loans to 15 years and even with 30 yr loans, the returns on South Bay properties are not appealing.

I would love to hear from seasoned investors who have been investing in hard hit areas such as CV.