There’s a lot of money looking for Residential Investment Real Estate
I got this article from a Multifamily Executive, an online trade magazine I subscribe to.
The article among other things discusses the “capitalization rate” of some investment properties in various parts of the country and how the old rules of thumb in evaluating a deal don’t seem to be relevant in today’s market.
Now while the author of the piece is discussing large multi-million dollar deals…. the metrics he’s talking about apply to Residential Investment Real Estate on the smaller scale as well.
I’m seeing multiple offers on Duplexes and Four-plexes here in the Sacramento Region that are beginning to remind me of the market about 10 years ago. An example I’ll cite here is a Duplex we just closed escrow on located at 10206-10208 South White Rock Rd., Rancho Cordova. We listed it at $259,000 with a Cap Rate at just a shade over 6%.
With multiple offers coming at this one, the price ultimately wound up at $273,000 and the Buyer, in addition to that, accepting about $4,000 in “deferred” maintenance regarding some dry rot issues on the exterior.
If that result is not the definition of a Seller’s market I don’t know what is. Just thought I’d pass on the good news if you’re thinking of Selling.
In the Mean Time…?
Make it a Great Day..!
Ed Favinger, Broker, CRS, GRI, SFR, CDPE
- Highway 50 interchange in Rancho Cordova needs money (bizjournals.com)
- Construction Growth Pushing Rancho Cordova Company To Look For Larger Warehouse (sacramento.cbslocal.com)