All Forum Posts by: Hugo Luna

Hi BP Fam! I have a young LLC based out of Sacramento and currently navigating some of the challenges that come with growth and structuring the LLC in the most efficient way possible. I have a background in Finance and some Accounting but don't necessarily have the time to navigate these areas of the business. I am looking to network with other local professionals that can offer expertise in these areas and potentially someone to partner with as we grow our business. If you are local and open to a conversation, let me know.

@Deepak Arora Arden Arcade is a great area to invest, and recently ranked #1 for 2021's top housing markets on Realtor.com. There is a lot of older properties with upside potential, often overlooked but with the right vision can be pretty lucrative.

My partner and I just closed on a multi-family property in the area and are currently renovating ourselves to bring in higher rents. We have a great realtor that we always use, and that is well informed with the area. DM me if you would like the contact. 

@Christian Rozo Thanks! 

We used a simple 1-2 page lease agreement that we drafted ourselves. There are many templates on BP, but we wanted to keep it simple and draft our own. The main points on our lease agreement were in relation to common areas and cleaning expectations. Since we lived in the home, the terms of the lease were a bit different. 

We did furnish the bedrooms. Since our target market was young working professionals, we made sure to include workspace in the rooms.

I attached our template for reference. We modify it as needed on a case by case basis. 

Hi @Christian Rozo ! My partner and I recently started investing in Sacramento and have some experience with room rentals. We purchased new construction in West Sacramento and were renting by the room for $1,000+ per room (1-2 years ago). Living near downtown and being near some of Sacramentos major employers allowed us to capture a good rental market for young professionals. Of course, things have shifted due to Covid, but West Sacramento, and areas surrounding downtown will continue to remain a good market for room rentals once things shift back. 

If you are in need of a good agent for this area, let me know. We have used the same agent on all of our deals, and they are by far the best in this region. 

Hi @Marie Tanjuatco

Unfortunately, I did not close on this deal due to unforeseen circumstances. It would have been a great deal especially with the continued rent growth. However, back in the market now so happy to hear about any potential deals. :)

While working on the downtown projects (pre-covid), I was working directly with Kuchman Architects. I worked directly with Gary. They are very knowledgeable with city requirements in Downtown, and also have a lot of experience with Multi-family units. 

@Cameron Lam I am following the same room rental strategy here in Sacramento, California. However, my partner and I have always managed room rentals while living in the property. We are now looking to purchase our next SFH and are curious to know what agreement you have with the tenants regarding your right to enter the premise. I would imagine it is important to occasionally check up on a property with room rentals to ensure everything is in order. Are you able to walk into the homes common areas at any given time, or do you typically give the tenants notice to enter?

After reading your post and learning that your tenants cover all utilities (since cost is minimal when spread out), I realize we backed out of some recent deals that would have cash flowed nicely. This post motivated us to keep looking with this new strategy in mind. Thank you!

Hi @Kalpesh Kamdar. I would be interested in knowing if there are any rental restrictions outlined in the CCR's for the particular community you are looking into. Also interested in knowing what the average per room rents look like, as well as the whole house rent.

Thank you!

Thanks for your input @Myka Artis. For Sacramento anything under 90 days is considered a short term stay. 

I am in the process of acquiring a duplex with 1 bed / 1 bath units (approx 750 SF), in the Downtown Sacramento core. I am analyzing creative ways to increase cashflow on the units through short term rentals (airbnb), or furnished units catered to traveling nurses. A non furnished 12 month lease for an updated 1/1 in the area is running $1,400-$1,600 per month, and a furnished unit can push upwards of $2,000 per month. However, furnished units are catered to short term renters. 

I have found that the short term rental permit from the City of Sacramento runs nearly $3,500 per unit, and takes several months to be heard at a public hearing for approval, with the risk of rejection. High risk, but potential for a more lucrative investment.

I've reached out to a couple airbnb hosts in the area to see what they are averaging for monthly income on similar units (1950's build and updated interiors), and the range is $2,000-$2,600. I am curious if anyone on BP is an airbnb host in this area and would be willing to share their experience and stats? 

Although cashflow is tighter here, some reasons why I am pursuing an investment in the Downtown Sacramento core include the following. 

• -I work for a developer in Downtown Sacramento and I am familiar with the future growth of the area. 
• -Appreciating rents in the area suggest increased cashflow over time. 
• -High demand for housing allows for lower vacancy rates. 
• -I have a personal interest in hospitality services and plan to make short term rentals part of my business.
• -Proximity to my current residence. Since I am self managing (potentially a short term), this is important.

If anyone has other creative ways of renting out furnished rentals without the need for a short term permit, please share as well. 

Any and all feedback is appreciated!

@Kumar Gaurav, any luck finding deals in Natomas?