All Forum Posts by: Scott Scoville

Hi BP Community,

I'm looking for advice on whether I should rent out or sell my home in Sacramento, CA. I’m moving out of the house soon and will be living rent-free with my wife at my parents' place in the Bay Area due to some recent life changes.

Here’s a breakdown of my situation:

• Location: Sacramento, CA (4 bed, 2 bath, recently renovated)
• Current mortgage payment: $3,940/month (including escrow)
• Mortgage balance: $475,000
• Current home value: $515,000 - $535,000 (based on comps)
• Rental estimate: Property management companies are quoting $2,600/month (with fridge/washer/dryer included), but some websites suggest it could go for up to $3,000/month.
• Planned budget:
  • $540/month for capital expenditures and maintenance
  • $100/month for lawn care
  • Tenant to cover utilities (gas, electricity, water)
  • 7.5% vacancy rate

We bought the house thinking it would be our forever home, but with our current situation, I’m trying to figure out the best long-term plan. Here are my main concerns:

1. Cash flow concerns: Based on my current mortgage and projected rent, I'd be looking at negative cash flow unless I refinance in a few years. But we won’t qualify for a primary residence refi anymore, and I’ll need more equity to refinance as an investment property.
2. Future investment goals: I want to own rental properties in the future, but I’m not sure if holding on to this one (which we already have) is the right move, or if it makes more sense to sell and build up savings for a better investment down the line.

I’d really appreciate any advice on what I might be overlooking here. Should I hold on to the house, despite the potential negative cash flow, with the hope of refinancing and future appreciation? Or should I cut my losses, sell it now, and look to invest in something else later?

Thanks in advance for any insights or perspectives!

Hi everyone,

I'm new to wholesaling and I'm looking for recommendations for title companies in the Sacramento, CA area that are familiar with working with wholesalers.

Any suggestions would be greatly appreciated!

I've had many beginning investors message me on BP who are in the Bay Area  or met them at local meet ups. The demographics of these investors are typically high income earners, almost 90% working in tech (software engineering, tech sales, computer science, etc). Age range: 20 (future college grad) to mid 30s so all pretty young. Interestingly only talked to a few health care workers  (physicians, pharmacists, RNs). From looking up on Glassdoor or Indeed I'd estimate their tech salaries to be $120,000 (on the low end) to $400,000+ (I didn't ask them their salaries, didn't want to be too nosey). I'm not sure if these high tech salaries will continue, some of them get compensated via RSU (Restricted Stock Units)

 My suggestions were to house hack (if they're still renting) or within a 2 to 3 hour drive. If the Bay Area is out of reach with high prices, I suggested Sacramento or Central Valley - I don't know much about the Central Valley except my local agent recommended Turlock and another agent said Fresno. Stockton has been mentioned but there are some high crime areas.  And to go for appreciation if you're going to look out of state, meaning don't buy cheap Class C properties OOS for the "cash flow on paper". They have the gift of time especially someone in their 20s. Some investors I talked to are doing MTRs and STRs (this seems challenging with competing with all the other AirBnbs in CA), some are trying to do a Joint Venture and buy multi-family. 

To the experienced CA investors, where would you recommend they invest or other strategies? Maybe syndications but some of them aren't doing well and if they don't know how to vet the operator, seems very risky. 

I live in the SF Bay Area and have decided to buy my first single-family home.

I fully acknowledge and recognize that the SF Bay Area and California (in general) may have some of the worst cash flow numbers in the entire country.

I've already traveled to cheaper Midwestern states to look at real estate opportunities, but have decided to invest here in the SF Bay Area as I'm purchasing with the intention of living in it first and foremost, and then renting it out sometime in the near future when I move overseas.

I'm looking for anywhere in the Greater Bay Area/Northern California region (even Sacramento & Central Valley is okay) with better than average purchase price to rent ratio, and some appreciation (if possible). 

My budget is 850k and I'm focusing on the below priorities:

1. Low vacancy rate

2. Decent tenant pool

3. At least some equity/appreciation

4. Decent purchase price to rent ratio

Some of the areas I'm looking into are:

Hayward

San Leandro

Oakley

Concord

Pleasant Hill

Brentwood

Tracy

Manteca

Turlock

Modesto

Sacramento

My concern about some of the areas specifically in the Central Valley (often recommended here on BP) like Fresno, Turlock, etc, is that looking at numbers the appreciation doesn't seem to meet the mark for me (purchase price to rent ratio is decent, but equity isn't very good), so I'm generally focused more on the SF Bay Area.

Any recommendations on cities or areas would be extremely helpful. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $200,000
Cash invested: $75,000
Sale price: $430,000

Pocket listing. Friend of mine wanted to unload it for his parents. Worked out very well.

What made you interested in investing in this type of deal?

Opportunity presented itself. I had always wanted to do a flip.

How did you find this deal and how did you negotiate it?

Pocket offering.

How did you finance this deal?

Cash

How did you add value to the deal?

Complete home improvement project.

What was the outcome?

Positive outcome. Nice profit.

Lessons learned? Challenges?

Learned so much on this project from start to finish.

Currently I own a property in Sacramento with enough backyard lot that has Alley access and my current Mortgage is at a 2.5% rate and don't want to touch or affect it.

I am in the process of considering a lot split with a plan to build a new doublex unit in the split lot with hard money or a construction loan. 

The plan is to refinance the new unit separately immediately after completion and pay back the loan. 

My question is does the lot split affect my current mortgage? Am I required to refinance my current mortgage if I split the lot?