3409 36th St Sacrmanto CA 95817 (Sacramento County)

[Amir B.]

Hello BP Community,

We just put in another offer late last night. 

http://www.realtor.com/realestateandhomes-detail/3...

I offered $250,000 with 20% and interest rate of 4.5%.

Does anyone know of this street or neighborhood? Can anyone provide any feedback?

Thank you.

[Jeff G.]

Originally posted by @Amir B.:

@Jeff G.

Thanks for your feedback as well. This is more like a speculation and less like an investment. I am thinking more like a primary. I am still learning how to run the numbers. How did you get these numbers? Still need to add maintenance, vacancy, and property management.

For the mortgage, I just google "mortgage calculator" and use their template:

For a insurance on a SFR rental, I generally estimate 0.2% annual premiums (0.002 times the purchase price), but since I suspect the Oak Park area has had a high number of claims (based on the various burnt out properties from squatters) I bumped it up to 0.3%: $250,000 x 0.003 = $750

For taxes I usually use Zillow:

So in most areas, I'd just take 464 and divide by $29116 to get a tax rate of 1.6%   However, some counties have more detailed info online and, fortunately, Sacramento is one of them.  If you click "county website" it'll take you to:

From there, click on "e-PropTax" to get to here:

I don't normally see a "Secured Supplemental" -- I'm betting there was a tax lien from the owners who were foreclosed on before the house was flipped.  Anyway, the tax rate code is 03-002 --click on that to see:

So you'll be taxed 1.1418% of the assessed value (which will probably increase to the purchase price next year).  But if you go back to the previous screen, you'll see a $214.62 "direct levy portion" -- click on that and you'll see additional taxes and/or Mello Roos:

An additional $214/year isn't too bad, but some areas of Sacramento county get pretty crazy with these direct levies.  For example, check out the additional $2,500 levy (on top of the expected $4000+) on this $400,000 house from Elk Grove:

Lots of people in this area are unpleasantly surprised by that additional $2500/year tax bill and wind up selling.

Anyway, for your taxes you'll probably have 1.1418% x $250,000 + $214 = $3070/year.  

For maintenance, you pretty much have to use your best judgement.  A brand new or completely renovated home will have much lower maintenance than a "survivor" time capsule from decades ago.  I'm not a fan of using percentages because you can have the exact same home built in 2 different parts of town collecting wildly different rents, yet having nearly the same maintenance...   From eyeballing the pictures of this property, I'd make a wild-***-guess of $50/month not including cap-ex.

Property Management?  7-12% -- I'd use 10% for calculations and try to negotiate down.

Opportunity cost?  That's whatever rate of return you could comfortably get if you invested your down payment in something else (stocks, bonds, a business, a private loan, etc).

Vacancy?  That'll depend on the area and your rent.  I've found that vacancy rates are very low in the Sacramento area for cheaper housing -- I'd probably assume 5% vacancy.  If this was in a more upmarket part of town, or you were trying to get the top end of the rent range you might use 10-15%.