I grew up on the Bay Area (Hayward) and then as adult made my home in the Springs for almost 20 yrs so small world!
The springs has been a hot market for the last 2 yrs and the prices have risen to levels that I think are overpriced and will cause rents to reach levels that can no longer be afforded (cost of living is not keep up). I have been out priced in over a dozen offers sometimes more than 100k over asking price. I think this is caused by 1031 timing restrictions for investors who must buy at any cost or risk paying capital gains. And we have a lot of non-local investors who are unaware of the impacts their purchases are having on the local market which in turn hurts me as a local investor and tenants looking for affordable housing. (We have one of the hottest markets in the country thanks to Denver). The majority of investors are looking at the middle class 4 plex and smaller which causes big bidding wars. Cash is King in these situations. But there's 3 areas not receiving as much attention:
1) Low income/rundown areas needing work
2) Units at 5 or more
3) New expensive multi-unit builds. Some of these duplexes range from 500k-1mil.
I'd love to see some of the low income get bought up and renovated so that it improves the neighborhoods overall. The biggest investors are doing just that. Buying up whole blocks, tearing them down and rebuilding.
The Mazatlan 4 plex you are looking at is in a lower income part of town but has potential if the neighborhood can be maintained by a good investor. 2/1 units can go as high as 850 if renovated (and if utilities are included) but generally you will be looking at lower income and section 8 tenants. Fair price rent would be better maintained at 800 or less for that location. That area of town can't go much beyond that without a major overhaul. It's all McDonalds, walmarts, pawn shops, liquor stors etc. And based on what I've seen, at that price it will sell if it's in fairly good condition. Depending on how you fund, it could make very good money. Or it could be a money pit. Inspection will help decide along with financing.
