All Forum Posts by: Marc A. Thurston

Your welcome.  If you have any questions, please ask.  

The following stats are for the mid year 2021 multifamily market (4 units and larger) in Bakersfield CA

YTD Sales Volume is $63.9M.  At this rate the volume will exceed 2020's volume by 20M.

650 Units have sold

The average Gross Rent Multiplier is 10.99 which is 1% higher than the end of the year GRM in 2020.

The average CAP Rate on closed deals is 5.34%

Average price per unit on fourplexes is $116,663 which is 7.82% higher than 2020's level.

Average price per unit 5 to 30 unit buildings is $84,800 which is up 7.2%

There have been no sales of buildings with more than 30 units.

The YTD appreciation rate is 9.87% which is impressive as it was negative 7.8% at the end of February 2021.  The market has been HOT!

In 2007 the all time highest average price per unit was set.  In May of 2021, after 14 years, a new high price has not been established eclipsing the old record by 2.1%

Citywide vacancy is .98%

The average rent increase on new move ins is 5.99%.  Studios are up 3.31%, 1-bedrooms up 8.64%, 2-bedrooms up 6.51% and 3-bedroom are up 5.5% 

For the first time in the history of the Bakersfield multifamily rental market, three apartment communities have broken the $2,000/month rent level.  

Finally per the California Apartment Association Website, effective August 1, 2021 Bakersfield landlords will be able to increase rents 9% under the statewide rent control law.  

I hope this is helpful information for anyone considering the Central Valley and specifically investing in Bakersfield CA.

Arthur - What size of buildings are you buying in Bakersfield?  Multifamily or single family?

Last month the average price per unit in the multifamily market finally surpassed the all time high set in 2007.  It took 14 years for the market to reach this level.  

Marc

Continue to network with individuals in the investment community and learn all that you can.  The learning aspect will never stop as the business constantly evolves.   I think you will find multifamily investors are very helpful.  I was fortunate enough to find two mentors who encouraged me and led by example.  BP is a great resource and I think if you research the internet you will find some other resources on the Bakersfield Multifamily market and investing in general.  When you are driving in your car, there are a wide variety of Podcasts on the topic that you can listen to daily.  

Once you develop market knowledge,  it will make your first purchase much easier because you will have some confidence.  Don't stress about making a mistake, all investors make mistakes occasionally, its just a matter of learning from your mistakes and not repeating them.   

I have been involved in the industry for 31 years and my only regret is that I wished I had started younger like you!

Fernando - In the last 60 days there were 46 buildings that sold in Bakersfield that were fourplexes or larger. The average price per unit has appreciated 5.7% since January 1, 2021. The GRM is now 10.85 and the average price per unit is $102,905. Values have now recovered 98.22% from the all time high in 2007. In the current sellers market there is 5 buyers for every 1 listing that hits the market. The low interest rates with opportunities to still receive cash flow is driving the market in Bakersfield. You have the right mindset and strategy for Bakersfield. Keep in mind it is a long term endeavor. Good Luck in your efforts.

If you are a member of the California Apartment Association, they post this information on their website. As of 2 weeks ago it was 5% +1% 

It will be updated shortly so this could change soon. 

With option number 2 you might consider purchasing a duplex or triplex in Bakersfield.  As Gene mentioned the prices are going up but you can still get cash flow.  You would need to target 25% for the down payment on a non-owner occupied investment.  Plus make sure you have reserves for the unexpected maintenance that occurs on investments.  

Jonathan - In my opinion as a real estate agent, I don't believe it is going to add any resale value to the building as a stand alone amenity, even though most everyone in the neighborhood has a fenced front yard.   Now if  your current or future resident pays more rent based on the perception the fence adds security, then obviously it adds value.  

I would defer to Gene regarding the permit issues as I have never researched the permit issue. 

Alberto - Welcome to Bakersfield.  About 60% of the multifamily investors in Bakersfield are from out of the area.  Here are some first quarter stats that will help you learn more about the market.

The 2021 Bakersfield multifamily market started off sluggish in January and February as the average price per unit declined 5.9%. Despite a low inventory of properties to purchase, the market in March had a phenomenal rebound as the average price per unit rose 7.42%. The average price per unit in Bakersfield now stands at $98,832/unit which is 94% of the all-time high price established in 2007. The citywide vacancy rate is 1%.

One interesting stat I discovered is that 53% of all listings are going into escrow within the first 30 days of being on the market. Those deals ultimately are closing escrow at a price of 102.94% of the list price. The remaining 47%, which take longer to sell, are closing at only 96.77% of the list price.

January – March Sales Volume - $32,594,800 (31% of the total volume in 2020)

Number of units sold – 352 unit

Average price per unit - $98,832 (94% of the all-time high price in 2007)

Average Gross Rent Multiplier – 10.63

Citywide Vacancy Rate – 1%

Average Rent Growth - .67%

Good Luck in your investing.  

Welcome Chad.  By gathering as much information as you can you will soon find yourself comfortable to make an investment. Best wishes on your investment journey!