All Forum Posts by: Joe Bertolino

@Andreis Bergeron

Sacramento. More upside and there actually is a barrier to entry. School ranking are much better in Folsom or Rocklin. In NB only 2/14 high schools are over a 6.

my 02 cents... you don’t need a PM for a single rental in Rocklin and you won’t have anywhere near 10% vacancy.  The vacancy rate is 0.8% including apartments.  Over a 7 year period I think it will be an attractive investment.  

I think we as a country have not built enough new construction to keep up with demand (5.8M units from 2009 to 2019 instead of an average of 22M units the 4 decades before) and a lot of landlords selling in a hot market so the rental stock is shrinking.  Less supply and more demand.  

Not that big of a deal in my opinion.    Install a mini split for $2500-4500 and be done with it. It is not preferred by most people but it actually works better than central HVAC in my opinion.   A house in Folsom sold for $990K with a mini split system.  The original owner was Swiss.  

 Respectfully,  if you think Sacramento’s economy is not on par and will pace Boise then you have not researched Sacramento.  

 Boise, Austin, Nashville, etc are not that far off of CA prices these days.   My area,  Folsom/El Dorado Hills ranks among the top suburbs in the State with nothing but 9/10-10/10 schools and pricing is on par with those three cities and possibly less.  

Admittedly this data is a little old but I suspect it still holds true.  

https://www.google.com/amp/s/a...

I am not saying you are wrong but a “millionaire” leaving CA is just an average retiree that sold their house and has a $70k a year pension or $600k+ in a 401k.  Many retirees leave CA but per the data they are being replaced by doctors and software engineers.  

My guess is that headlines that say “California looses .0034% of its state population” wouldn’t generate much attention.  I’m sure seeing an extra 8000 CA license plates in Phoenix feels like an invasion but keep things in perspective.  The 480,000 people that moved to CA out earn the 650,000 that left by a wide margin .  

I will just speak on the Sacramento market. 

1. People can afford what they are buying.  The bidding wars are funded by cash/equity rolled forward.  Average equity in the area is north of 30% (per Black Knight).  

2. We have not built a significant number of housing units since 2008.   In those peak years we were building 18,000 units a year in Sacramento... since then we have built 4-8K while we are getting 20,000+ Bay Area transplants.  

3. The bidding wars are pretty heated for dialed in houses that are intentionally under price...  and that is what we focus on but the reality is that not every house is getting 40 offers and going for 100K over.  In Sacramento there are 1051 houses that have been on the market for over 30 days as of this minute.  There are under 300 active listings under 30 days.   

4. I see investors that cannot cash flow at the current rents but they will cash flow easily at market rate rents. The rental market is Sacramento is extremely tight with a lot of upward pressure. The landlords that are cashing out are mostly selling to families (who pay more than investors on FHA loans with 3.5% down) so the existing rental stock can command large increases (outside of covid issues). Look on CL, FB market place and zillow... in any zip code there are 3-5 rentals that get snatched up in days. Many of the older long term landlords in the area have people in place paying 60% of less of market rate. I am selling a 4plex house that will get $1500/mo for a 1/1 when renovated but the current tenant is paying $550 because they have been there 16 years. There are deals all over the place that cash flow easily at current market rents. You have to do the work to turn them over but the numbers are solid.

Having just suffered through a closing with the lowest price title company I can promise you it isn't worth the potential few hundred dollar savings.  The turnover is so high and morale is so low that it makes everything much more difficult.  Notary fee looks high but that's an estimate and you can avoid it by signing in the office.