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Sacramento Triplex Fixer Offers Investors Upside Income Potential
Sacramento triplex fixer needs work, on almost a half acre.
This Sacramento triplex fixer is finally on the market. The poor seller has been hounded by “well meaning” neighbors asking if they could buy the property, but the seller instead elected to list the triplex with a top Sacramento Realtor working at the top real estate brokerage in Sacramento. You know the name of Lyon Real Estate. You see our signs everywhere.
With nearby duplexes selling in the $220,000 range, imagine what you can do with a triplex for $200,000! It already has 3 meters from SMUD installed.
Competition nearby for sale (within a 1/2 mile) consists of a lonely fourplex listed at $449,000, but that lot is smaller. This parcel shows at .46 acres, per the Sacramento County Assessor’s office, which means it’s almost half an acre! There is also a garage that had been converted.
The property is fenced and secured. The previous tenant trashed the interior, and the sellers spent $5,000, per legal advice, to haul out the trash. The Sacramento triplex fixer is sold in its AS IS present condition. What you see is what you get. There are no warranties and limited disclosures.
Still, this property is situated on a fabulous street in the south Curtis Park neighborhood of Sacramento, that area between Sutterville and Fruitridge and West of Franklin. Below is a view of the street. Looks like everybody could be at work during the day, which is a good sign.
Front yard of Sacramento triplex fixer, east view toward Franklin.
2961 29th Avenue, Sacramento, CA 95820 is exclusively offered by Elizabeth Weintraub at Lyon Real Estate at $200,000. Please call your Sacramento Realtor, Elizabeth Weintraub, at 916.233.6759 for more information. Inspect property with offer, and all offers sent to the sellers immediately. Note to agents: please submit an offer on a Probate Purchase Agreement. Fast closing (10 days) is possible, no court approval.
Why Sacramento Real Estate Agents Get All the Good Deals
Agents get the good deals that home buyers pass up.
Do you know why so many of the good deals seem to go to real estate agents? I’ll tell you why. It’s not because agents are stealing all the good deals. It’s because they recognize a good deal when they spot it. When one is working in the real estate business day after day and year after year, I don’t care how unfocused you are, eventually some of it rubs off and sticks with you. So many of my long-term listings that other buyers and investors pass by because the properties need work, end up sold to a Sacramento Realtor. It’s sorta becoming par for the course. In fact, I’ve thought about buying a few myself but that would be a conflict of interest.
A few years back I had a short sale home in Carmichael to sell that was completely trashed. The seller just picked up his briefcase and walked out, leaving all of the furniture and his personal belongings. Same situation for a short sale home in Galt, now that I pause to reflect, and both sold about the same time. That home in Carmichael, though, nobody would buy, even though it was only $100,000 and the bank had approved the short sale. We were apart by $5,000 and the investor bit the dust. Finally, a real estate agent picked it up, fixed it up and flipped that home for about $300,000.
Investors and other buyers today seem to pause at the sales price and then offer less for no apparent reason. They act like they’re bartering for a trinket at a Tijuana flea market, saying things like I’ll give you $350,000 for a home listed at $395,000. It makes me want to retort: Tell you what, why don’t we raise the price to $450,000 and then you can offer $395,000? They don’t understand that it’s not make-me-an-offer season in Sacramento, and many homes are generally priced right where they should be. If list price and market value are synonymous, why would an investor get a break?
Homes that need work often linger on the market because they are not what most first-time home buyers want to purchase. Although many fixer upper prices are already reduced to reflect the work required, most home buyers desire turn-key, ready to move into, and they don’t want to tackle any work. If a home needs a roof, for example, they can’t seem to figure out that a roof might cost about $10,000, and they can finance that roof through an Energy Efficient Mortgage (which takes one day to install) and, when they are finished, they will own a home with a brand new roof, and the sales price is still a bargain.
I sold a home like that in Elk Grove to another real estate agent last year, and I’ll most likely do it again this year. That’s because agents see the value. They know the neighborhoods. They don’t automatically assume longer days on market means the price is too high because that’s not always true and they know it. But then they also work with first-time home buyers, so they understand the disconnect going on. Buyers don’t often spot the good deals but agents do.
Selling Rental Homes in Sacramento That Are Occupied by Tenants
Selling Rental Homes in Sacramento is easier with cooperation.
Some real estate agents in Sacramento will not list a rental property if the home is not easy to show, even if the price is right. The reasoning is the home might not sell for a while if buyers can’t get inside because tenants won’t cooperate. Oh, tenants will say, sure, they’ll cooperate, but then they bolt the inside of the door, don’t answer their phone for appointments and make life all-around-hell for the Sacramento Realtor. This is why I caution sellers to either evict the tenants or give them an incentive.
I have two new listings this week, a home in Elk Grove and another in West Sacramento, in which we were able to quickly move out the tenants, clean up the home, and put these homes on the market — while it’s still sizzling hot for sellers. Of course, I help sellers prepare the home for sale, either through referrals to contractors or staging advice. We want the home to show in its best light.
One rental home in Sacramento closed recently with a tenant in place. This tenant claimed to work from 6 AM in the morning to 11 PM at night — and maybe she held several jobs, I don’t know. She would not allow a lockbox. I had no interior photographs. Buyer’s agents struggled mightily to make appointments because the tenant would not call them back. I would text her and encourage agents to text, but the tenant was slow to respond, if she responded at all. This particular home probably could have sold for 10% more than it did, and the seller knew it, but the seller, for personal reasons, wanted to leave the tenant in place.
The seller also would not evict the tenant during escrow, which meant either a buyer would be saddled with a tenant and could not take immediate possession or the buyer needed to be an investor. There are not many investors in the market anymore like a few years ago. This is a situation that many agents would walk away from.
I am not an agent who needs to close every single escrow in 30 days. I have incredible patience, and I can wait, especially if that’s the seller’s intention. These sellers wanted a certain type of buyer who would pay a certain price. It took us 211 days to find that buyer but we closed escrow. Compare that to other homes in that area that typically sell within 30 to 45 days over the past two years. There was nothing wrong with this home. It was the obstinate tenant and the lack of seller motivation, but that’s OK with me. As long as it will eventually sell, I will list that home and sell it.
My time frame is my seller’s time frame.
The Fall Sacramento Real Estate Market Update
Say what you will about the down Sacramento real estate market years of 2005 through 2012, but the best thing to hit Sacramento real estate is the fact that period is over. This spring marked the turnaround in real estate. We have a little bit more inventory this fall than we did last spring; however, by all practical standards, it’s still a seller’s market, yet buyers are really the deciding factor. So, is that a seller’s market? Based on inventory alone? I don’t believe so. I believe it’s a buyer’s market disguised as a seller’s market.
You know what I see when I look at this chart? I see twice as many homes for sale and half as many selling. The sold numbers have dropped below the pending sales. But the market is still relatively stable because the pending sales are about the same over the past 15 months. This means buyers have choices.
You can look at what the giant investment firm Blackstone accomplished in Sacramento, buying up some 1,500 homes and turning them into rentals, and you can say that was a bad thing for communities. Now, Blackstone has turned those rentals into securities and leveraged their investments by selling off 75% of its value in the form of bonds to pension funds, or so they say. Hard to know how they are establishing market value. They might have decided that their investments have grown by 25% and are leveraging 100%.
It’s similar to what other investors in Sacramento have done by buying homes supposedly for cash and then converting those offers into hard-money financing. I’ve had to counsel investors that writing an offer for cash when the intent was hard money is not a cash offer. It’s a hard-money financed offer. Cash is cash. I would suggest they include the option in the offer to convert to financing, and many did just that.
Of course now, the investors are pretty much gone. I have a fixer in South Sacramento that has not yet sold and, last spring, this home would have had multiple offers with buyers fighting over it.
Most homebuyers in Sacramento who intend to occupy a home, well, they want that home in turn-key condition. They don’t want to have to make any improvements. Many want their homes to be new or remodeled, with all the bells and whistles.
In closing, I spotted a survey by NAR the other day about the types of things that buyers wanted in a home. Top of the list was energy-efficient improvements. Never have I heard a buyer say that energy efficiency was a #1 concern. I wonder if the utility companies or manufacturers of energy efficient appliances sponsored this survey? Or, maybe they interviewed only buyers from Davis. Nope, Sacramento buyers want those granite counters and stainless appliances. Energy efficiency is welcome, but I doubt it’s a #1 motivating factor.
Bank Pricing for Short Sales and Foreclosures
Some real estate agents wrongly believe that the price doesn’t matter in a short sale. Buyers might have adopted that attitude from their agents or perhaps they just plucked it out of thin air, but I doubt it. They tend to confuse short sales with foreclosures and bank-owned homes. My favorite is when I hear that all banks are desperate. Maybe it’s the get-rich-quick-schemes they read about that makes them so eager to believe something so wrong.
You think those guys bidding on the courthouse steps at trustee’s auctions are picking up tons of property way under market value? Market value means what the market will bear — the price a seller is willing to sell for and a buyer is willing to pay, which is generally substantiated by comparable sales. Flippers get a little bit of a discount for buying the home without guarantees and sometimes without inspections, because there is an inherent risk. They feel it’s a calculated risk. Some homes they flip for higher profit margins than others. Some require less work. But it’s not as easy as buying a home one day and turning around the next to make $100K on the deal. They generally must improve the home.
Your best deals are probably made behind closed doors at the bank. These are the bank-owned homes that the banks bundle in a bulk package and sell the entire package at one lump sum to investors. But they’re not going to make the same deal on one little house just for you and just because you asked. Not gonna happen.
Moreover, it’s not gonna happen on a short sale because the bank doesn’t own the home. The bank is simply considering allowing the home to sell at market value because they would get the same amount if it went to foreclosure. There is not a lot of incentive for a bank to authorize a short sale if the price isn’t right.
Sellers know this. Especially Sacramento short sale sellers who work with Elizabeth Weintraub, because I tell them. Every Sacramento short sale agent knows this. The bank wants market value. End of story. There is no point in submitting a lowball offer, working through 2 to 3 months of paperwork submissions only to be denied at the end because the buyer won’t move on price. Just say no to start with and get on with the short sale.
Some buyer’s agents get upset and accuse me of not working for the buyer. That’s right. When I am the listing agent, I don’t work for the buyer. I work for the seller.
