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Welcome Back,

Hello everyone, I hope you had a fantastic Monday to start the week off great! Today will be diving into another real estate market in California and we will also talk about how you can navigate property management. Enjoy!

Daily News Updates:

In a significant policy shift, President Donald Trump has instructed the Treasury Department to halt the production of pennies, citing high manufacturing costs. This move is expected to save the government millions of dollars annually.

The U.S. stock market experienced a positive uptick today. Steel and aluminum producers, such as Nucor and Cleveland-Cliffs, saw their stocks surge following the announcement of proposed 25% tariffs on imports. These tariffs aim to bolster domestic production and protect American industries.

In international news, French President Emmanuel Macron has unveiled a major artificial intelligence (AI) investment plan, dedicating over €100 billion to advance the sector. This initiative underscores France's commitment to positioning itself as a leader in AI technology.

On the environmental front, a powerful winter storm is sweeping across the Midwest, bringing heavy snowfall and freezing temperatures. Residents are advised to exercise caution and stay updated with local weather advisories.

In the business sector, McDonald's reported a decline in U.S. sales for the fourth quarter, missing revenue and earnings estimates. However, global comparable sales saw a slight increase, indicating growth in international markets.

In a tragic incident in Sweden, authorities have confirmed the identity of the Örebro shooter as Rickard Andersson, a former student at Campus Risbergska. The attack resulted in 11 fatalities, and investigations into the motives behind the shooting are ongoing.

In the tech industry, companies like Strategy are increasingly hoarding bitcoin to boost share prices. This trend is encouraged by the crypto-friendly stance under President Trump but carries significant risks due to bitcoin's volatility.

In entertainment news, Elon Musk has declared that the public "won't be seeing" Kanye West's X account anymore after the musician deactivated it. This development follows a series of controversial posts by West.

In the energy sector, BP shares are rising after an activist investor acquired a significant stake, pushing for performance improvements within the company. This move indicates potential shifts in the company's strategic direction.

Market Snapshot:

Bakersfield, California

The Bakersfield real estate market has experienced notable growth, with the median home price reaching $420,000, reflecting an 8.7% increase year-over-year.

Homes are selling faster, averaging 40 days on the market, compared to 33 days the previous year. The market remains competitive, with properties receiving an average of one offer each.

• Median Home Price: $420,000

• YoY Price Growth: 8.7%

• Average Days on Market: 40 days

Deal Of The Day:

4-plex in Central Bakersfield

• Price: $750,000

• Units: 4 (2-Bed, 2-Bath each)

• Monthly Rental Income: $6,000

• Cap Rate: 7.2%

This centrally located triplex offers a solid investment opportunity with a 7.2% cap rate. Each unit rents for $1,500 per month, totaling $72,000 annually.

Proximity to downtown amenities and public transportation enhances its appeal to potential tenants.

Deal Rating: 7/10

I would definitely say this is a great opportunity for stable growth but the biggest thing wrong with this deal is the fact that it is a decent bit over the average price for a property in this area which may make it hard to see a return in the first couple years.

With that said the cash flow from this property will be great as well as a steady rent increase YoY.

Investment Strategy:

Seller Financing

In seller financing, the property owner acts as the lender, allowing the buyer to make payments directly to them instead of through a traditional mortgage.

This can be beneficial in competitive markets or for buyers facing challenges securing conventional loans.

For example, purchasing a property for $400,000 with a 5% interest rate over 20 years directly from the seller can result in favorable terms for both parties.

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Current Interest Rates:

Bakersfield, California

• 30-Year Fixed Residential: 6.3%

• 15-Year Fixed Residential: 5.9%

• Commercial Rates: Starting at 6.5%

Interest rates have seen a slight uptick, influencing monthly mortgage payments. For a $300,000 loan at 6.3%, the monthly payment would be approximately $1,860, excluding taxes and insurance. Investors should factor in these rates when calculating potential returns.

Real Estate Tip:

Navigating Property Management in Bakersfield

Investing in Bakersfield's rental market can be lucrative, but effective property management is crucial.

Engaging a local property management company can alleviate the challenges of tenant relations, maintenance, and legal compliance.

For instance, a property manager charging 10% of monthly rental income would cost $150 for a unit renting at $1,500.

This investment can lead to higher tenant satisfaction and better property upkeep, ultimately enhancing long-term returns.

Economic Conditions

Bakersfield's economy is deeply rooted in agriculture and oil production. However, recent economic pressures, including inflation and rising operational costs, have led to the closure of some local businesses.

The city is actively working to attract and retain businesses through various support services and programs

Market Rating: 8/10

With it being in California prices for the properties will be higher but with that comes a steady and steeper YoY return as well as higher rents. This market in particular is a great choice for intermediate or experienced investors seeing how the entry cost may be to high for new investors, though if the capital is there I would say go for it.

Key Takeaways:

• Market Update: Bakersfield's median home price is $420,000, up 8.7% YoY.

• Deal of the Day: $750,000 triplex generating $4,500/month in rental income.

• Tip: Familiarize yourself with local zoning laws to ensure compliance and maximize property potential.

• Investment Strategy: Consider seller financing to secure favorable purchase terms.

• Interest Rates: Residential mortgages are around 6.3%, impacting investment calculations.

• Economic Impact: Local businesses face challenges due to economic pressures, but city initiatives aim to bolster economic development.

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That’s All For Today

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