All Forum Posts by: Garrett M.

Hi Hugo,

I have a number of trusted lender contacts here in SoCal.  Feel free to PM me for their contact information.

I, too, am looking to invest in Fresno (my hometown).  Where is the quadplex you are looking to purchase?  

-Garrett

Hi Steve,

The two meetups in Orange County I attend are the North Orange County Meetup and the Lake Forest REI Meetup. Both have casual, non-pitch environments with great people.

The former's next meeting is November 10.  Information can be found here: https://www.meetup.com/North-OC-REI-Network/, or by contacting @Ron Herrera.

The latter's latest meeting was yesterday.  Information can be found here:  https://www.meetup.com/Orange-County-Real-Estate-I....

I look forward to meeting you at either, Steve.

-Garrett

@Antonio Scerra,@Jason Krickis right.  From what I understand, the contract provides the Seller must deliver the property vacant.  The Seller has not done so.  I fail to see why this situation needs any further "assessing."

Hi David:

Feel free to PM me regarding a few contacts I have.

-Garrett

I agree @Chris Allard; the purchase price on the Clovis fourplex is steep.  I can see how Tarpy might be less desirable than, say, North Fresno/North Clovis, but compared to the other property in Calwa, it is leagues ahead in desirability.  Also, you're right that the desirability is largely due to proximity to the award-winning Clovis schools.

No problem, @Amir B. There are definitely properties in Fresno that cash flow and are around $300,000. For example, just scan Loopnet - Fresno, and you'll find this fourplex:  http://www.loopnet.com/Listing/19917623/2553-S-Hol...

Looks to be in fairly good condition, 7% cap rate, actuals of $22k NOI, and public records show the property was purchased in 2015 for $290k. "There's probably some wiggle room on price, and the financials are solid; I should take a further look." Or, at least, that's what someone who doesn't know the intricacies of the area would say.

Unfortunately, the moment I saw the cross streets, Jensen and Golden State in Calwa (an unincorporated CDP in Fresno), I clicked next.  Cognizant of the demographic rules above, we know that this property is in a war zone. And we can confirm this by looking at criminal data in South Fresno. Finally, we should know that large stretches of Golden State are notorious for prostitution and drug dealing.

By contrast, let's look at a property in Clovis: http://www.loopnet.com/Listing/19833265/605-W-Ashl...

This fourplex is listed at $415,000, with a 3% cap rate, and actuals of $12k NOI. While the cash flow (if any after debt service) is trifling, I know that because this is in a great area (Willow and Ashlan, right next to Fashion Fair and Fresno State), I'm going to have a great tenant pool and feel comfortable visiting my property.

In sum, there are properties in Fresno that cash flow in your price range. You will; however, have to balance the potential cash flow against the many risks of owning in a war zone. 

Hi @Amir B., like most metropolitan areas, each neighborhood in Fresno/Clovis is unique.  I am initially skeptical that an REA in Folsom has the particular knowledge relating to these unique neighborhoods, but, even assuming he knows the market, please be aware of the following. 

Typically, the boundaries for "A Class" properties in Fresno are Shaw to the south, Blackstone to the west, Copper to the north, and Fowler to the east. Within those four boundaries, you are looking at prime North Fresno/Clovis real estate with some of the best schools in the state, virtually no crime, and newer homes occupied by professionals and upper middle class/upper class families.

East of Fowler is not dense enough for real estate investment and is rural territory.  West of Blackstone can be fine, but is more B class; similar with northeast of Shaw.  South of Shaw can get hairy pretty quickly.  The Tower District, which is Fresno's nighttime hot spot is revitalizing, and you can consider that area a B area.  Mostly anything south of Shaw, west of the 41 or south of the 168 are either Class C or true war zones.

If you know this going in, you can better prepare yourself for discussions with your REA.  I hope this helps. 

@Jay Orlauski when I come up to Fresno next, I'd love to meet with you and pick your brain about your investment strategy.  I have the areas down, but I would appreciate some experienced investor insight.

@Chris Gerenser, my business partner and I are currently asking the same question.  In Seven Years to Seven Figure Wealth, Brandon Turner explains how, with just $20,000, he grows his wealth to over $1,000,000 in seven years.  An analysis of his wealth creation shows that a massive 45% of his wealth was made by purchasing undervalued properties.  Yet another 29% of his wealth is made through forced and value appreciation.  Just 22% of his wealth was made in cash flow (the last 4% was mortgage pay down).  The lesson I learned from reading that book is that purchasing undervalued properties and forcing appreciation, not cash flow, made Brandon wealthy.

Similarly, after speaking with dozens of the most successful investors I have met with here in Orange County, not a single one told me they achieved their great wealth through cash flow properties; much less turnkey properties.  All of them told me fascinating stories of purchasing hugely undervalued properties in down markets from distressed sellers.  The majority of them self-managed their properties until they grew to such a size where they needed property managers. 

I find this discussion very interesting, so I look forward to hearing your thoughts.