All Forum Posts by: Jeff Zimmerman

Hey Dalia, as far as appreciation goes these areas are both great and won't have any trouble appreciating, selling or renting.  Those are 2 great areas inside 2 great school areas in Clovis unified. Both are highly desirable for purchases and rentals.  

With limited info I'd say the 3 bed in 93730 is a bit better only because the other is in a gated community. The HOA rules for rentals can be strict in gated neighborhoods and it will also cost you some extra cash. Gated communities can appreciate less depending on the type of homes that are in there, because people in Fresno and Clovis tend to prefer not living in HOA's. However 4 bed rentals are hard to find so if the rules in the HOA are friendly to rentals the 4 bed may be better.

what size is the yard and lot?  are either of the homes 2 stories?  small lots (under 6000sqft) will not do as well and 2 story homes are not as desirable as 1 story.

If it's a 2 story home make sure the primary bed is on the ground floor, if the primary is on the second floor that may be a deal breaker as most buyers don't want to climb stairs as they get older and you will eliminate a decent amount of buyers/renters if the primary is on the second floor. 

let me know if I can answer any other questions, happy to help! 

Hey Mario, thanks for sharing your story man.  I'm so sorry for the hardships you had to face growing up.  Sounds like you are on your way to great things!  Let me know if I can help with anything as you get started investing.  I'm up in Fresno, I live and invest here.  Sounds like you lived here for a while.  Good luck man! 

that's awesome, thanks for that.  Which sources did you use?  I'd love to check them out

@Benjamin P Cohen I agree with you on your thoughts. When it comes to a single family home in general you can't really control the appreciation, there are little things you can do that improve value but you are mostly dependent on the market doing it's thing.  On average homes appreciate 3%/year, that's been much higher in recent years but with everything taking longer to sell now it seems like we are going to see things return back to typical appreciation.  The advantage you may have is that instead of having to save up money again you can tap your appreciation through a heloc or refi cash out to go make other investments, but that may also take some time. 

your second idea is the most conservative and a great way to start out, that's how I started and I still really like long term because its mostly hands off once its' stable.  I'm biased to that but know others that have different philosophies (like short term) and do really well. it really all comes down to where you are most comfortable and what you'd like to invest your time into. Good luck! 

@Thomas Jameson what's up David, there are a few nuances that change with each home, different parts of town will have different things you can do to improve value. i.e. with the ADU, in some areas of town that may be a bit of a nuisance as buyers prefer a larger backyard and would rather just by a 4 bed rather than a 3 bed with an ADU in the back. In other parts of town an ADU can make the home a lot more attractive and raise value because it's likely that a larger family will purchase it and wants older kids or a grandparent to live in the back.

Apart from that, adding value to your home is better done when you are getting ready to sell it unless you want to enjoy your improvements prior.  As an example, if you upgrade the bathrooms and kitchen now, which is typical to raise value, it may be done in a really trendy way  but in 5 years the trends can change, so it's best to wait until you are ready to sell it to improve it so you are as trendy as possible with your materials and design.

as far as rent goes, the ARV in the backyard may improve your overall gross rent if you can create a separate entrance to it so that someone can rent the back separately and now you have a duplex, your rent will go down in the house slightly because you are taking away their yard space but usually that's worth it.

there could be a lot of other things that may help you improve value but you'd just need to have a walk through with a trusted realtor who knows what they are doing and they can give you some good thoughts on where to spend money and where not to.  Good luck! 

Hey Ben, those are great questions.  I think all of them carry value and you just have to figure out which one you are most comfortable with to start

-the first strategy seems like a really good one if you want to go for a lot of appreciation but lack of cash flow.  There is merit to that as you can enjoy your own home while it keeps moving up in value and making up for some of the expense by renting rooms.  the other nice thing about this strategy is that you can be extremely hands on with your first investment

-your second idea, buying a rental where it is cheaper, is a good one too as it may allow for actual cash flow.  the negative is that you will have to drive to your first rental to check on it which can be cumbersome but it also may set you up to buy multiple properties faster while you are still renting in the bay 

-the last one, buying an Air bnb is also a good one and I've known people who have done well with it.  the areas they get in trouble though is when they buy a property that's too small and therefore isn't as rentable which means you get more vacancy and/or they buy a place that is extremely slow during certain parts of the year (i.e. spring melt in tahoe) which again, raises the vacancy.  but it's all just numbers and research with short term rental managers in those areas to see if it makes sense. 

in short, all of these have their pros and cons, it's just about deciding which pro's and cons you want to deal with or where you feel most comfortable.  Good luck! 

Fresno does do well with mid and short term rentals, that market has taken a bit of hit recently with how hospitals are using fewer and fewer travelers along with the fact that the market has saturated a bit as a lot of investors jumped on board the mid and short term rental train during covid. The numbers I've seen on P & L's recently are still good, still better than long term SFH's but usually they are at about a 50% vacancy rate. It's more important now than it was before to have something that really pops to tenants like having walkability or being next to a freeway. Kyle Stanley is a really great manager here in Fresno, he'd be good to chat with.

@Angelo Llamas hey Angelo, good questions.  Right now we still have a really low inventory compared to our number of buyers and renters so at this time we are planning on the market remaining strong for the foreseeable future.  Rents keep going up 10% each year right now.  It makes it tough to buy since there is demand on the buyer side but the appreciation is bright because of that reason.  Good luck! 

@Brendan S. good luck!  The first deal is always the hardest.  Fresno has been good to me in my investing journey, I'm fortunate enough to live here and I subscribe to the notion to be close to my investments, especially when I started out so it's all worked out.  We do have quite a few Bay Area investors that we work with in our office, they like that the drive is only 3 hours to check on their investments.  If you are curious about the area feel free to message me, I'm always happy to share anything that's helpful.  

Congrats Raj, I bought a value add 4 plex for my first real investment and learned a lot just by doing, I get your apprehension as I was there too, I even lost money on it for a bit when I first bought it, mostly because I didn't know what I was doing but I figured it out and put quite a bit of cash in my pocket after I figured it out.  So just jumping in is the best teacher in my opinion.  

As far as places to look, smaller towns are off the radar of bigger investors and can usually yield better cap rates and prices per door as well as neighborhoods that often get overlooked in bigger cities.  In the Fresno area the smaller towns to look into are Dinuba, Orosi, Reedley etc...  Areas that are often overlooked in Fresno are areas in Central and Southeast (I'm in escrow on a central property right now).  

Good luck man!