Buy to rent REI questions

[rumberobueno]

Hello everyone !

I am looking into buying a few properties to rent them out to provide some cash flow and I have a few questions. I live in the SF Bay Area and property around here is too expensive to provide decent cash flow but it looks like there are some areas not far from here (~1 hr drive) where you can find properties more reasonably priced (~100K or so). I am specifically looking at Stockton, Tracy and Sacramento. At least for the start I would be most comfortable with buying property that is located within driving distance from where I live.

I am new to REI but in the past I did own a condo which I sold in 2008 so I am familiar with the buying/selling process.

Here are the questions:

1. How can I reliably determine the occupancy rate of a given area/neighborhood ? Buying a home would be easy but if I can't rent it out it's not gonna be of any help.
2. How can I find a good property management company for that area ?
3. How can I determine the going rate for renting a given property ? I would check craigslist and see what similar properties are listed for there. Any other thoughts ?
4. How can I determine if the house is located in a good neighborhood ? I know that you should drive around and see how houses look in the area, etc. Any other thoughts ?
5. Is anyone familiar with the areas mentioned above ? If yes, do you have any feedback about these areas ?
6. Are there any other areas around SF Bay Area that you would recommend for investment purposes ?

Thanks in advance,

    rumberobueno

[aaronwilliams123456]

1. How can I reliably determine the occupancy rate of a given area/neighborhood ?

This can be found by calling a real estate agent in the area. If you focus on areas that people want to live you should have no problem in this department.

2. How can I find a good property management company for that area ?

Your best bet in this department is to go the local real estate investors meeting in this area and talk with other real estate investors.

3. How can I determine the going rate for renting a given property ?

This can be done by looking in the local newspaper and talking to real estate agents who rent in that area.

4. How can I determine if the house is located in a good neighborhood ?

This is easily solved by talking with real estate agents and real estate investors who do business in this area.

Good luck.

[ReCoachDennis]

Good job Aaron.

Definitely use a realtor to help you out.

Look for an area specialist. They'll provide bettter insight than even some appraisers.

Here's how you find em: Pull up solds in the area you're looking at for the past 12 months. See who has sold the most in that area.

That's the person you want to talk to

Dennis

[rumberobueno]

Thanks a lot guys !

This is very helpful.

[redhawk]

Learn the area your investing in . You are supposed to be the expert in that area so you know when a good deal comes along or you will be at the mercy of the Realtor, and their interests are not your interests. There is only one way to become the area expert. Compare ,compare compare.
No one can do this for you or they will take all of the good deals.
redhawk

[rumberobueno]

Hi redhawk !

Could you please elaborate on "compare, compare, compare" ?

As I understand it is that I would compare the various listings that show up in a given area but in order to figure out which areas are more desirable I would still need the help of a realtor.

Am I off here ?

Thanks,

    rumbero

[redhawk]

What a Realtor thinks is a more desirable neighborhood is a higher priced one. The more desirable neighborhood is the one I can make money in. Once you get to know a neighborhood you will know if there are any bargains there or not. The only way to recognize a bargain is to compare asking prices to sold prices. Then compare size and amenities to get a feeling for what you can realistically sell a house for. Do the same in the next neighborhood. Then compare one neighborhood against the first one. How many properties can I buy to make money on. If they are equal then buy in both, but most likely one will be obvious. And after you have compared 50 to 100 houses you will be the resident expert for that neighborhood
redhawk

[rumberobueno]

Thanks redhawk !

rumberobueno