All Forum Posts by: Matt Owen

Fantastic story Shelby Cook I am on track to try something similar. Me and my girlfriend are getting ready to purchase our first home. We want to get a single family in which we can rent the remaining rooms and cover the mortgage. I have been looking at multi family properties to find some cash flowing deals but it's difficult to achieve $500 a month around here. Where did you get your duplex? Is it also in mammoth? Great story and very inspiring. I'm hoping to join you in retirement in 10 years but hopefully I find some sweat properties that cash flow like yours and I'll be there much sooner. How did you find the properties you own? Do you do any marketing or was it just relationships or MLS?

@Josh Justiniano

Those are my feeling exactly. The best cap rate I've found so far has been just over 9 and everything on the west side in nicer areas has a cap rate around a 4 which just doesn't seem worth it. 

I'm hoping there will be a correction following the drop in oil price but it hasn't happened yet. Maybe that will bring more local opportunity. 

I'm pretty new to the whole thing but I've been looking in Bakersfield for about a month now. I can't find any single family's that pencil out but there are some multi families on the east side that appear to cash flow but I'm a little worried about the tenant class that they might attract. 

I'm feeling like I need to start doing direct mail or something else to find off market deals. The MLS seems mostly overpriced.

Still scouring daily but depending on your goals and skill set you may have better luck than me. Let me know if you start to look into Bakersfield harder. 

Matt

Brian Stark I would say the unit is overpriced. While the 50% rule is just an estimation it gives you a good idea. If you are looking for $400 cash flow ($100per door) then you would need to cut your NOI by $400 per month. Leaving 600 to cover taxes, insurance, property management, vacancy and repairs/capex. Some areas are harder than others to find deals. I'm in California and very few properties especially off of MLS or loopnet pencil out. Happy hunting, Matt

Welcome Claire! I've only been on BP a short time and am fairly new to real estate investing but I'd be interested in connecting with you since I'm also from Bakersfield.

I've been doing lots of market research and evaluating properties off the MLS but haven't found much that meets my criteria. I gather from your website name that you do direct marketing and I'm interested in finding some off market deals. Maybe we can talk about working together on something in the future or if you would be interested in providing a direct marketing service we could discuss that further!

Matt

Sounds like an awesome deal I'm pretty new and not entirely sure about investing out of state but I'd be interested in talking with you further. Please message me if you are interested in bringing in a partner who is newer to real estate. I'd like to discuss the delegation of duties and other specifics. I do have cash on hand to bring to the table. Thanks, Matt

The numbers look good to me. If your thrown off by the cash on cash return it's because you are doing a VA loan with no down payment. So your total cash outlay is extremely low. When you divide by zero your returns head toward infinity. Will you be living in the basement unit or one of the three bedroom units? I would recommend re-running it and taking out the rent from the unit you will be living in. That will give you and idea of what the numbers will look like while your living there. You could also take management out since you'll be doing it yourself. Overall the numbers look very good for when you move out, put it under management and get a third renter in there. Congrats. I hope I can find down thing like that! Haha Matt

Derek,

I know we were discussing something similar on the other thread but I was curious where you located that 3bd? I'm assuming this was an off market deal as everything I've been able to find on the MLS has been sub 1.4%. Although my focus has been small multis and not SFRs so I could easily be incorrect on that. What part of town is that property located in?

Any insights on what you expect from Bakersfield following the oil crash? Did some reading online and Forbes and other articles stated a ~18month lag time between crashes and housing market adjustments. We should be coming up on that figure shortly and I'm curious if you have any prior experience with that. Cheveron has another 250-300 employee layoff happening in a month or so as well so the cuts keep coming. 

Matt

I understand that neighborhoods can shift pretty suddenly. A few blocks one way or another can make a difference. I don't want to stereotype to widely. I'm definitely still looking into properties on that side of town but I also want to make the right decision.  

What I've been seeing in my research are cap rates around 7-8% on the high end for Bakersfield. I'm ok with going after that but the nicer NW areas seem to have cap rates around 4. Many with negative or break even cash flow. Any tips for a newbie to Bakersfield and investing?

I want to find some off market deals but I haven't quite wrapped my mind around the best way to proceed doing that yet. I think that's where I'll find something that is more appealing for both the neighborhood and the numbers. 

I'll definitely run some properties by you when I narrow it down a bit. I've been through about 45 properties and 6 met a 7% cap. Everything is 1-1.3% rent/price ratio. 

I appreciate all the help and guidance!

Matt

I've found that the cap rates in the NW and southwest to be pretty low. But I do understand that I'm getting into a class of tenant that I don't have much experience with. Are there parts of downtown and east that are good? I know oleander and la cresta are decent. Any other areas I could look at that might be cheaper?