Sacramento Buy and Holders - any out there right now?

[Ahmed Moussa]

Hey Fellow BP'ers,

I've started working with a RE agent in the Sacramento area to help identify possible buy and hold properties <$150k to be rented out. I've even expanded the search to condos with lower HOA fees <$150/month as the cash flow doesn't seem to be there at all. Our search has been primarily around the Natomas - Downtown areas, but there just don't seem to be any properties that make sense...like 2% cap rate kind of deals are what I'm seeing after crunching the numbers :(

My question is - are there any investors out there in the Sacramento area seeing deals over a 5% cap rate? What neighborhoods seem to make sense if a low cap rate is incurred...meaning is that a growing/great neighborhood with values expected to rise? 

I'm willing to take a hit on cap rate if there are undervalued neighborhoods worth looking at that can grow in the next few years...or are being gentrified. 

Thanks in advance for any insights from locals!!

[Eric Black]

Hi Ahmed,

Well, I can't give you current activity but we bought a few properties in 2009 in Sacramento. We still own one in the 95838 zip, on Municipal Drive. We bought it for $125k, it's a 3/2 and we put a good amount of work into it. We've had the same renters there since 2010 and are getting $1350 per month, we haven't raised the rent. I think the 1% rule is harder to find these days. We have taken the rest of our investing outside of California. 

Best of luck in your investing!

Eric