For some people who may live in more affluent areas of California, the Central Valley has somewhat of a stigma for people who do not enjoy living in the heat. But what is wrong with investing in Fresno or Kern County? Prices are relatively low, and the cash flow from Single Family and Multi-Family are unlike anywhere else in California. You can still buy properties under $100K that generate $200-300 or more in cash flow every month. That is a conservative number and investors in most cases are conservative. So it makes sense to buy in the Central Valley if you're investing for cash flow. But don't mistake it for Capital Appreciation. Values don't tend to rise very high unlike the trend that was seen from 2001-2006. The Central Valley was one of the areas hit the hardest by the economic downturn, but that made way for a market correction we see now. If you do find a property that is in the $20-40K range for sale, it would be a great investment even if you had to put $5-10K to rehab the property. The rents would still cover any debt service incurred...as long as you buy the property correctly. This means, you know your cost's going into the deal. Always keep in mind that if you have bad numbers, the deal will be bad. Know your strategy going into the deal and have at least 2 fall back strategies if the 1st doesn't pan out. If you want to flip the house, can you rent it if you don't sell it at your asking price? Can you hold the property if it doesn't rent right away? What type of financing term will you use? Will the seller carry back or do you need bank financing, Private or Hard money? These questions and more will determine if your numbers are good or bad and whether you should go forward on a property. Happy Investing.
Mario Estrada, Jr
Central Coast REIA
