Sorry for the book, but I'm keeping a close eye on this thread. I'm out in Oakdale and in the process of refinancing cash out of some Modesto properties. I can't decide if we (my brother and I) want to buy more in the Central Valley or buy out of state.
My thoughts of being "pro" Central Valley:
-Prices have accelerated for a long time now. I keep hearing how they're topping out (have literally been hearing this for years), but the Bay Area people keep coming over the hill and buying up the valley since it's so "cheap". I keep hearing that Bay Area tech workers are getting green lighted to work from home permanently and will be making a bigger exodus out of the city (although I'm not sure they're dreaming of the Modesto area. haha). Still, I'd personally be surprised to see the prices crash unless it's a national thing - which I'm a little concerned about.
-I LOVE my property manager. He's not cheap, but we've had zero problems and the rents are sky high. He's super aggressive and everyone loves him.
My thoughts on being "anti" Central Valley:
-Rents don't pencil out that great. You can still cashflow (especially 4plexes etc.), but it's definitely not like it used to be and the rates of return seem higher out of state.
-I'm still not completely sold on the economy. I know I'm a Debbie Downer, but I'd rather stay on the sidelines for a few minutes in cash to see what transpires. I'd rather miss out on 5-10% of appreciation over a few months instead of buying into a storm.
-My main "anti" bias is the state as a whole. The laws seem completely anti-landlord from statewide rent control to the continuous extensions of the "no evictions" thing. I'm not wealthy and can't keep my rentals if all of my tenants decide that they're not going to pay. We haven't seen that (yet), but it's a real concern...
I love what @Jabbar Thomas mentioned in terms of being intentional. I'd tell you if you're going to buy in Turlock, don't go all out to buy the most you can (unless it's multiple doors). Keep your payments within your ability to pay, let prices appreciate, save cash, refi and keep that first house as a leverageable asset that you can keep using.
One of my co-workers about 20 years ago explained that they bought their first house for way less than they could afford to pay. They lived there a few years and saved up a down payment for the next place. Again, bought below their means, but a better house and just kept working their way up the ladder. I haven't spoken to her in a while, but I think they've collected several rentals (that keep getting better) and with appreciating rents, etc. they keep moving up in the world! haha. It's always struck me as a good way to get rentals when in an expensive market.
Anyway, it's an exciting time in your life, so be sure to enjoy the ride! Imo, it really is the journey and not the destination and I'd trade it all to be able to do it again (I'd have to be young again though - no deal on just starting over as of right now) haha.
Good luck and please update this thread with your decision as I'm sure your logic will help influence my own.
@Jabbar Thomas
