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South Sacramento

Seeing the reality of Blackstone’s mass purchases

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It’s one thing to hear about investors purchasing so many properties in Sacramento, but let’s see it. Even if you’ve only been following real estate casually, you’ve likely heard the private equity fund Blackstone has picked up well over 1000 properties in the Sacramento area since last August. No, that’s not a typo.

Let’s look at a few areas of Sacramento to visualize some of the neighborhoods where Blackstone has been most active. Each red label below represents a property that is owned by Blackstone. The bulk of these sales were purchased since last August, but there are still quite a few that have been owned for years.

Properties owned by Blackstone in Natomas

Blackstone has been purchasing as “IH2 Property West” and “THR California”. They’ve had a strong presence in Natomas as you can see – especially in older Natomas. It is important to note the information above is based on Tax Records alone and could very easily not include MANY other purchases that did not end up listed in Tax Records.

Properties owned by Blackstone in Rancho Cordova

There have also been quite a few purchases by Blackstone in Rancho Cordova. Most of the sales are in the 95670 zip code, while only a small amount have been located in the 95742 zip code.

Properties owned by Blackstone in Rosement and College Glen

There are also a decent number of Blackstone properties in Rosemont and a few sprinkled through College Glen and La Riviera. Neighborhoods that are ripe for first-time owners have typically been the primary target of this investment fund.

Properties owned by Blackstone in South Sacramento

Last but not least, here are Blackstone-owned properties in South Sacramento. This market has been a very affordable area under $200,000, which has been a sought after target price for the investment fund. By the way, Deutsche Bank just gave Blackstone 1.5 billion in additional credit over the past week (on top of their initial 2.1 billion credit line to purchase properties). We’ll see if any of the money finds it’s way into the local market.

Video interview with Blackstone from Bloomberg (worth a watch):

Questions: How do these images stir you? Or what do they make you think of? If you are renting from THR / IH2, what has it been like to rent from them so far? Any stories to share?

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Trading Fourplexes in South Sacramento

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It’s interesting to see the sales history of a 4-plex subdivision in South Sacramento. There are 30 units off 24th Street in the Meadowview area and only 3 out of 30 units have not transferred in the past 4-5 years. Or in other words, 90% of units have sold in recent years. The purple dots below represent sales over the past 3 years and sales beyond that were labeled accordingly.

Fourplex Units off 24th Street in Sacramento - Meadowview Area

What does this tells us? This shows me how much turnover there has been since the bubble burst. For example, one unit sold for $560,000 in 2006 and then resold in 2011 for $155,000. It used to be really difficult to pick up a fourplex under $400,000, but that’s not the case anymore. Also, I’m reminded of investment strategy as well as risk. Some investors make purchases and then sit on them for the long haul before reselling, whereas others are looking to purchase and then resell in a relatively short time period.

Mistakes Investors Make: By the way, here is a video I did with Sacramento real estate broker Joel Wright on mistakes investors sometimes make when purchasing real estate. I think we saw some of the mistakes Joel mentioned

Holes in a Fourplex: I inspected one of these units years ago and it was an odd situation since there were actually large holes in the walls of each unit big enough to let me access the entire fourplex. I could simply make my way through each hole to get to the next attached unit. This was actually a bit on the creepy side though since the property was powerless, stripped and clearly had a problem with squatters.

hole in wall to other fouplex unit

Was it still four units or just one big unit?  🙂

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

When did the foreclosure floodgates open in South Sacramento?

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I’m doing some research in the Meadowview area of South Sacramento right now, and I wanted to share a trend graph. Check out the past three years of sales for all properties south of Meadowview Road, east of Freeport Blvd, west of Detroit Blvd, and north of vacant land (excluding newer construction built in the past ten years – that’s really a different market despite being located in the same boundaries).

Based on the graph above, when do you think a wave of foreclosures hit the market in the past three years? You got it right. The market was really hurting during the last quarter of 2008 and the first couple quarters of 2009. There is evidence that the market was already struggling in 2007, but the decline really went into high gear in the latter part of 2008. This release of the foreclosure floodgates caused a hefty and quick decline in property value as can be seen above. You can see also that the market has since since experienced some recovery. In my opinion, beyond inventory decreasing, one of the things that has helped to shape property value over the past couple years in this neighborhood is investors purchasing and flipping properties. There have been an enormous amount of flips in this area.

If you have any questions, let me know. You can give me a call at 916.595.3735, email me, or comment below.

A flashlight tour of a dark boarded-up house in South Sacramento

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I wanted to give you a little tour of a dark boarded fixer-upper house in South Sacramento. Honestly, sometimes it feels a bit creepy to inspect houses like this because utilities are off and every window and door is boarded with plywood. You never know what or who might be lurking in the darkness, right? 

As always, I had permission from my client to shoot and share video. I take client confidentiality very seriously for every appraisal I do, and I never share information on my blog or elsewhere that is confidential.

Let me know if you have any questions. Call me at 916.595.3735, send me an email, or connect with me on Facebook or Twitter.

What do you think of the video?