Profile picture for AlexChen111

Should I buy a 4-plex in south sac or single family homes in Fair Oaks?

I have some money that I would like to use to invest in some property in Sacramento area....I could either buy a 4 unit complex in south sac or 1 single family house in Roseville / fair oaks / Carmichael area....may I get some input? I know that the south sac area is a little shady....but it'll be for investment purposes.
  • September 19 2011 - Sacramento
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Answers (7)

Profile picture for Wil May
Hi Alex,

I counsel my investor clients by simply providing them with solid numbers to help make their decision.  I run each property through an investment form called an APOD (Annual Profit Operating Data). The APOD is basically a  profit and loss statement for real estate investment properties.  After selecting several properties you may be interested in purchasing and running them through the APOD the decision is simply a matter of what rate of return vs risk you are comftorable with. 

Your investment in Real Estate is similar to other types of investments, in that if you invest with the hope of appreciation you are gambling, but if you innvest in something where you know the returns and can manage the risk you will be a more successful investor in the long run. 

Also anything you purchase in the Sacramento Area at this time should be providing a decent cash flow the day you purchase and rent the property. 

I hope you find this information as useful as my other clients have.
  • September 20 2011
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Why not purchase a multi unit complex in Carmichael or Citrus Heights? There are many Duplexes available in both areas for extremely cheap prices. 

If you have the time/patience to manage it, a multi unit property will almost always provide a larger return on investment. 

I have worked with many investors recently that are purchasing multi unit properties in these areas and they are receiving 10% to 15% returns on their money.
  • September 19 2011
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Profile picture for RealtyTeam916
Over the long term you will most likely be happiest with an single family home investment. You will not have many different kitchens, bathrooms, AC/Heat units etc to worry about repairing. Cleaning up & renting are also easier deal with. In an area that you deem shady I would stay away from just for your own piece of mind. 
  • September 19 2011
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Alex,
In addition to what has already been said 3-units and 4-units can be difficult to finance due to no or not enough recent comparable sales. Even if you are an all-cash buyer, somewhere in time you might what to sell. I suggest a duplex or single family.

Happy funding, Rudi
  • September 19 2011
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It's going to take a long time for the market to recover in Sacramento. When we finally do see a bit of appreciation, it's likely to happen in the single-family residential market long before residential investments. I'd opt for the single-family home in a stable neighborhood over investment property in any area you call "shady" any day.

Elizabeth Weintraub
Broker-Associates #00697006
Lyon Real Estate
  • September 19 2011
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Profile picture for sunnyview
I would not put money into South Sac even for investment purposes. There have been issues in that area for decades and the houseing crash has made those issues worse. Roseville/Carmichael/FairOaks are are more stable Sacto suburbs that are more likely to rebound and bring higher rents/sales prices long term.

You need to ask a local agent what kind of ROI you can get in Sacto in the South area, but my guess is that you can find comparable multi family properties in upper Arden/Arcade for a similar ROI if you want to buy more low end long term. It all depends on what you want.
  • September 19 2011
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Talk to a good Realtor in your area.  Information is free.

Then make your decision, and use the Realtor that helped you vs going with another.

Good Luck
  • September 19 2011
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