Mr. And Mrs. Boomershine, a San Jose couple, have purchased a 38-unit, garden-style apartment complex from the Huey Family Trust for $1.75 million. The property, built in the early 70's, was described to GlobeSt.com by Marcus & Millichap's Rocky Schotsal as the "worst property in the zip code."
According to Schotsal, who brokered the transaction on behalf of both the buyer and seller, the property was suffering from a 40% collection loss upon closing of escrow.
However, this did not keep the complex from being in high demand. Multiple offers were made in the property's five days on the market. The complex, although in need of renovations, is located in the Greenhaven submarket, which is considered one of Sacramento's most desirable neighborhoods. The current rents in the building are below market value, ranging from $678-$800, monthly.
"This is a value-added opportunity in one of Sacramento's most stable submarkets," says Schotsal, adding that the area has the 3rd highest median income and one of the tightest vacancy rates in the county.
The property is also close to downtown and built in an infill location, meaning that developers are prohibited from adding supply in this area for future competition.
The Boomershines plan to renovate and reposition the property on the market. Sacramento is an area in which the real estate market, while having decreased over the past year, is expected to remain stable, as it is an attractive place for people to move to escape the high cost of Bay Area living.
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