All Forum Posts by: Kyle Kinsley

 At the time a 5 bedroom property did not have a significant difference in the rent you were able to get. 

 I don't have much info on that. Obviously the student population is growing in Merced but I never really hear of any "student off-campus" housing. 

For the most part students that are incoming freshmen or have came from out the area to go to a UC usually live on campus. After a couple of years they usually end up living with roommates and they find an available rental and all get on the lease. 

I think it's rare to have students living off campus with people they don't know. I think there might be a market for it but I don't think it's a big part of the UC Merced housing.

I'm not sure if this was what you were asking for or not. Feel free to message me if you'd like

The market is super competitive right now. Since COVID, there has been a decrease of 39% in inventory from a year ago in Merced. 

That is a huge difference considering it seems like there are still the same amount of buyers in the market. 

I manage properties in Merced. We have been lucky with the quality of tenants that we have placed in our properties in that they are all still paying rent but I know a lot of self-managing owners and management companies that have 15-25% of their tenants not paying rent. 

Personally, I think that when evictions are allowed to happen in Late February (estimated; subject to change) I think that we will see a lot of inventory back on the market once the landlords evict their tenants.  

When you have more houses available than buyers wanting to buy that is when it becomes a buyer's market.  It is difficult to say how much the market adjusts but I think the inventory comes back which would be good for buyers. 

Feel free to reach out if you have any other questions about Merced. I know the area very well

When you close on the duplex, let me know! I am a property manager in the area. I don't mind helping you find/select a tenant when you are in that stage of the process.

What are you trying to do? Sell real estate? Flip houses?

I just feel that we are setting new historic lows every month it seems like. It just doesn't seem sustainable. Then again, I have been thinking they will increase for the last 2 years but they seem to keep going down. If I stick with that opinion, eventually I will be right hahaha

I wasn't around but I heard back in the 80's interest rates for homes were like 18%. Now I don't know if something systematically changed to have them drop lower but that would be ridiculous today. 

Right now, Interest rates are around 2.75-3.5% for good credit. I would say even if they go to a still good rate of 5% people's buying power goes way down. For example, on a 30 year loan sales price 305k with 5% down and a 3% interest rate a mortgage payment would be (roughly) $1,892 per month. The same details with a 5% interest rate your monthly payment would be $2,226. That's a huge difference in people's buying power. 

I think San Francisco/Oakland has a lot of tech related jobs. With covid allowing employees to work remotely and still get paid the same I think a lot of investors are probably thinking "I don't really want to find a new tenant during this COVID. Let's just sell it." Probably a reason for so many homes coming on the market. 

High paying employees that work in tech can now live in any part of the country and still get paid very similar than living in the Bay Area. I read an article the other day that Mountain View saw a DECREASE of 18% in rents since COVID started. It makes sense, rather than paying $4,000 a month for a 2 bedroom in Mountain View, why not move and save $2,000 a month. 

I can't speak on the Sacramento market because I don't follow it very closely but in Modesto area, rents are at an all time high. A 4 plex in Modesto in 2016 was probably selling for roughly 300k, in the past 6 months investment properties have skyrocketed. I see 4 plexs selling for 500k easy. 

I think there is a lot of 1st time investors that got into the market in the last 3 years and with rents so high the numbers make sense but I feel that once rents decrease they won't be cash flowing nearly as much and could potentially losing money every month. 

I think that the market will go down in 2021. I feel that once banks start foreclosing on homes and evictions are allowed to happen there will be a lot of homes both for rent and for sale. If interest rates increase, which I feel inevitable has to happen in the next 12-14 months, there will a natural decrease in sales prices. Once there are more homes on the market and rents decrease home values will go down. By how much, who knows! If I knew I might ask for a consulting fee LOL

Hey BP! 

I own a property management and real estate sales company with my brother. We've been running that for about 1 1/2 years. Our business income has good up to this point. We had to put our business in an S-Corp to get licensed with the state. Because we needed insurance, we started paying ourselves a minimal salary as employees so we can write it off. All of the other income just stays in business accounts. 

I had a question about financing a deal. Now I currently don't have a property I would like to purchase, but I was looking at investment properties and realized I didn't really have the income to show if I did want to purchase a home. 

My question is

1) How can I finance a deal with low income? Even though I am owner of a business that earns more than enough to have 3x the payment, my personal income is not enough. 

2) Can a cooperation to buy a house?  

Does anyone have any good suggestions as to how I would be able get financing for a home? 

Good question. I do like the Lennar homes in terms of quality, but both of those areas will see the same amount in rent. 

Merced is a good area for rentals. With the student population growing and the home prices not crazy high; it makes a good area to invest in. 

I see this mistake happen all the time with out of the area owners. They buy big (5+ bedroom homes) and try to get $2,500 in rent. The numbers work out if you have students in there with the per bedroom simple math but you want to buy a house that appeals to both students and a family. 

The bigger the house, the more you will pay for the house and the more you pay for the house the more you will expect in rent. Don't buy a 5 bedroom house in Merced. That would be a huge mistake. Keep your buy price under 300k and do your research on what you can get in rent.