Help analyzing in Sacramento.

[Keith Torsen]

Hey, BP peeps.

So for practice, I've been attempting to analyzing one deal per day. I'm still a few months away financially from pulling the trigger.

It's been three days, and three deals analyzed. So far so good, right? Trust the process and all that.

My issue is: in Sacramento, the three properties I've run the numbers through are all cash flowing negative at conventional 20% down loans. It's not in the negative too much, but three properties and three negative cash flows, therefore three negative ROI. Today's property, for example, only lost about $18 per month for two separate buildings, and the lot is zoned for 5 more units. Could be a good deal for someone.

My question therefore is: going forward, can anyone give me a rule of thumb for quickly vetting potential deals? Like the "X% rule" for Sacramento and surrounding areas.

Specifically I'm looking for small multi-family in the $350,000 to $400,000 range.

With these within three, I'm thinking the 1% rule will suffice from now on, but I would love the input of other local investors.

Thanks!