New Listing - 3498-3950A-3950B Sherman Way, Sacramento, CA 95817

Amazing renovated 3-unit / triplex investment property opportunity near UC Davis Medical Center! You will appreciate the attention to detail and recent renovation. Front unit (3948) is a spacious 2/1 with a sunny front porch, light and bright with lots of windows, built-ins, updated kitchen with a Wedgewood stove, updated bathroom bathroom. Rear unit (3950A) is an adorable 3/1 with a downstairs bedroom and bath, and 2 fun attic bedrooms with skylights and cool nooks and crannies! Also features a quarter basement, updated kitchen with new quartz counters. ADU unit (3950B) is an efficient 1/1 that is newly built and has lots bells and whistles, including new kitchen with stainless appliance, new bathroom, a minisplit a/c, breezy rear deck. All units have new dual pane windows, refinished or new flooring, fresh interior/exterior paint, new light fixtures. Landscaped yard and planter boxes. Disclosures, income/expense statements available. 5.8% estimated Cap Rate, 13.14 estimated Gross Rent Multiplier. Offered at $875,000. MLS# 20031999. 3D Virtual walk-through and more photos and detail available at 3498-3950A-3950B Sherman Way, Sacramento, CA 95817.

July 2017 Sacramento County Real Estate Statistics...

This summer has pretty much flown by and candidly, I can't believe that the kids are going back to school this week, and that the 90 degree days are a welcome relief from the scorching hot temperatures we had in July. Pleasantries aside, the Sacramento real estate market, just like the weather, seasonally changes a bit this time of year and 2017 seems to be no exception.

Inventory has increased! Thank goodness, because the market sorely needs it. Though by increased, I mean it went from about 1 month of inventory for sale, to 1.4 months of inventory for sale. 1.4 months of inventory is still super low. It is still a seller's market for homes priced correctly...multiple offers abound. A balanced market where neither buyer nor seller have an advantage is between 4-6 months of inventory for sale.

A seasonal increase in inventory is typical. If you compare this to the market dynamics from July 2016, you will see it looks remarkably similar.  I expect things will be much the same this year.

The July 2017 Sacramento County single family median home price climbed to $355,000...if typical trends for this time of year hold true, the median price should bump along for the rest of the year and not change too dramatically.

The market is still far from our peak median home price, which per Trendgraphix was $395,000 from August 2005. Adjusted for inflation to today's dollars, that median value would have to reach $492,653 (using the US Department of Labor Consumer Price Index Inflation Calculator) to be equivalent to our previous peak.

I see A LOT of demand for purchasing Sacramento homes. My buyer clients face lots of competition from other buyers, and my sellers enjoy the multiple offers. For one, Sacramento rent prices have increased quite a bit, and with that many renters who can afford to buy are looking to purchase to stabilize their monthly housing expense. Additionally, there are many people looking at Sacramento as a less expensive alternative to the bay area where median home prices are more than double and triple those in Sacramento (my most recent closed sale just last week was for a family relocating to Sacramento from Oakland). And then there is the fact that during the decline, fewer homes were built in the greater Sacramento area - so we did not increase the amount of housing stock to keep up with people creating households in the area. We are seeing some new development in Sacramento though not nearly enough.

So with that, the low supply coupled with the high demand and strong underlying economic conditions should keep the Sacramento real estate market on its current trajectory for a while...

Earned the Seniors Real Estate Specialist (SRES) Designation...

As I was completing my continuing education for my real estate broker license renewal, I thought it would be useful to couple that effort with earning a new professional designation - so I earned the Seniors Real Estate Specialist (SRES) designation. It was a great refresher on some of the issues I regularly assist clients and their families with when buying or selling - probate sales, sales via a living trust or an estate, relocation into senior housing, or finding homes that meet the special needs of someone who is aging, etc. And I also thought it was fitting that, while every other designation I have earned emails an electronic certificate of completion, the SRES Council snail mailed a certificate to me.

New Listing - 3052 8th Avenue, Sacramento (Curtis Park area), CA 95817

Adorable 3 bedroom, 2 bathroom, 1,148sf home on a deep lot near Curtis Park in Sacramento! You will love the spacious layout with vaulted ceilings, remodeled kitchen with maple cabinets, stainless appliances, and granite counters. New engineered hardwood flooring in the living areas, new carpet in the bedrooms, and freshly painted interior. Huge backyard is a great blank canvas for your landscaping creativity. Newer central heat and air, newer water heater (both replaced in 2014), and attached garage. Close proximity to the park, schools, fun shops, great eateries, and more! Don't wait! Offered at $364,900. Subject to seller's 1031 Exchange (at no cost to buyer). For more photos and information, please visit 3052 8th Avenue, Sacramento, CA 95817.

Selling a Sacramento investment property is a lot different than selling your own home. Part I; Working with your tenants...

Recently I have received a lot of inquiries to list and sell small "investment properties." What's an investment property? An investment property is any rental property - for example, a duplex, triplex or fourplex, or a single family home or condo.

Since property values in Sacramento have increased in the last few years since the bottom of the real estate market, it seems that folks are looking to cash in their chips. The element that is most interesting to me is that most (not all) of the investment property sellers I am speaking with are looking to sell because they don't like being landlords, and rather than roll their equity or sales proceeds into a bigger better investment property via a tax deferred 1031 Exchange, they are just looking to cash out.

Selling an investment property is a lot different than selling your own home. First and foremost, somebody else, a tenant, is likely living in the property. Second, since you don't live there, you may not know much about the property. Third, there are things like deposits, maintenance expenses, utilities, repairs, and rental income to factor into the equation. And fourth, often times the monthly rental income the property produces is an important element in determining value -- not just the property as compared to the sales prices of other recent sales of comparable properties.

Over the next few weeks I will write about the different considerations investment property owners face when selling...

Let's talk about tenants first. A tenant can really make or break your property's sale. An uncooperative tenant can cost a seller thousands of dollars in a sale. For example, are they tidy or messy? Some tenants treat rental property like their own home, are clean and take pride in its appearance, maybe do minor maintenance themselves, and let their landlords know if something is broken and needs fixing. On the other side, I've seen some tenants who are borderline hoarders, their units smell bad, there are dirty clothes and moldy food everywhere, and they haven't cleaned the bathroom in a few years. A new buyer looks at those issues and immediately thinks in terms of potential cleaning and repair costs, and may pass on the property all together or hit you up for a lower price or concessions for repairs. Another thing to consider when selling a property with a tenant: are they going to be cooperative with allowing showings, or not? Some tenants are very understanding, want to make a good impression on their possible future landlord and accommodate showings and access to the property for inspections. Other tenants will feel threatened by the possibility of a new landlord, feel afraid they will be kicked out of their home, and not make the effort to make the unit available on their own accord. Some tenants will insist to be present for showings and sabotage the potential buyer’s impression of the property.

So what do you do when you have a tenant who falls into the problem category? I find the best approach with tenants is complete and total transparency -- do not hide the fact you are planning to sell. Nothing creates more tenant hostility than a landlord who lists a property and the first notice a tenant gets is a seeing a “for sale” sign in the front yard. Communicate with them. Let them know that you want/need to sell and that you want to make the process as easy as possible. Ask to make an appointment with them and meet at their unit - this allows you the chance to talk, and allows you to see the unit. If the unit is messy, offer to have it professionally cleaned for them. Most tenants will jump at the chance to have their unit cleaned for free. If you can afford it, you might offer to incentivise the tenant by offering a temporary reduction in rent in exchange for cooperation with showings while the property is for sale. If you do that, be sure to do it in writing with very clear parameters. Be sure to introduce your Realtor to the tenants and make sure they know how to contact each other. Set clear parameters for arranging showings and access -- like “by appointment with 24 hours notice.” If you need to arrange extended access to a buyer for inspections, maybe offer them some movie tickets in exchange for being away 3-4 hours.

Most tenants do want to help you succeed in your sale and make a smooth transition to the new owner...next week I will talk about disclosures for a rental property since you don’t have first hand knowledge of the potential idiosyncrasies about the property...

New Legislation: Assembly Bill 92 will affect investors doing 1031 Exchanges and purchasing property in other states...

Are you an investor looking to do a tax deferred 1031 Exchange for a property in the state of CA for a property outside of the state of CA? Read on...

Thanks to California Assembly Bill 92, starting January 1, 2014 if a taxpayer who sells an investment property in California and purchases via a 1031 Exchange a "like-kind" investment property located outside of California, that taxpayer must file an "information return" with the CA Franchise Tax Board (FTB) for that taxable year and every year thereafter in which the gain or less from the exchange has not been recognized. If a taxpayer fails to file such information return and tax returns, the FTB may propose to assess the amount of tax, interest and penalties due by estimating net income from any available information, including the amount of gain.

Essentially what the state of California is trying to do is be sure to collect any tax owed in the future. If an investor does a 1031 Exchange, tax on any gain from the sale of the property is merely deferred. Tax will still be owed at some point in the future, and the state wants to make sure it is in a position to collect it.

So, you should ALWAYS consult a CPA or qualified tax professional before engaging in something like a 1031 Exchange, and if you are considering purchasing a replacement property outside of California, you will need to be sure to comply with this new law. I wonder if the burden of doing this year after year will be worth the tax deferment for state tax?

Fair Housing Laws: be careful how you describe and market a home for sale...

I have been asked a lot lately by my seller clients - how will you target specific market segments when you market my property? Ok, maybe they don't ask exactly like that, and I'm inserting my Realtor-ease into this post...I might hear from a seller, for example, "I think my property would be great for a family...Or this would be great for a single person...Or this would be great for a member of the church down the street...etc. How will you market my property to {fill in the blank}?"

The answer is - very carefully and deliberately as so not to violate federal law! Questions like this can set off alarm bells for me when I hear them, even from the most well-intentioned people. Certainly I can and do market my listings in ways that will reach different audiences, but using direct marketing language where these "groups" are concerned is a big no-no! Directing advertising toward a specific group, in theory, automatically excludes other groups, and therein lies the violation of Fair Housing laws. It surprises me how often I see direct marketing language used by other agents, or folks trying to FSBO. An example of this language might be "great family home" or "waking distance to the park" or "perfect for parishoners of the Catholic church," etc. Per US Department of Justice website, Civil Rights Division, Fair Housing Act:

Refer to Sec. 804. [42 U.S.C. 3604] "As made applicable by section 803 of this title and except as exempted by sections 803(b) and 807 of this title, it shall be unlawful--

(c) To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination."

Saying something like "great family home" discriminates against single or unmarried people. "Walking distance to the park" discriminates against folks who are are physically handicapped and can't walk. "Perfect for parishoners of the Catholic church" discriminates against folks of other religions. Alternative language might be "great 4 bedroom home" or "close proximity to the park" or "you will love all of the nearby local amenities such as shopping, places of worship, schools, etc."

So be aware of these laws and careful when choosing the words to market a home. The US Department of Housing and Urban Development (HUD) has some Fair Housing Q&A's on their website, as does the US Department of Justice.

Want to sell your investment multi-unit Sacramento property? I may have buyers for you...

Are you considering listing your Sacramento investment property (like a duplex, triplex, fourplex, or 5+ unit property) for sale? I have a couple different clients who are listing properties in other geographic areas and starting 1031 exchanges with the intent to buy investment property in Sacramento. These are all-cash buyers. And no, I'm not talking about some big hedge fund looking to buy up half of Sacramento...these are just regular people looking to make a few key investments in Sacramento real estate.

What is a 1031 Exchange? A properly structured 1031 Exchange allows an investor to sell a property, to reinvest the sales proceeds in a new property purchase and to defer all of the capital gain taxes. There are some timelines to "identify" the replacement property to be purchased that will be coming up in the near future. So timing is a critical issue.

So if you have an investment property you are considering selling -- call me. I am working with a few different investor buyers who will be participating in these tax deferred exchanges soon that need to identify their replacement purchases soon. Budgets for these purchases depend on a few factors but could be anywhere from $200,000 - $1,000,000, and they could purchase one or more properties.