Sacramento Housing Opportunity Fund Case Studies
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3721 20th Avenue, Sacramento, CA
Home Details: 2 bedrooms, 1 bathroom
Neighborhood: Oak Park
Purchase Price: $37,500
Rehabilitation Cost: $19,650
Sale Price: $88,000
Hold Period: 5 months
Return on Capital: 40.3%
Alto Capital purchased the home from a distressed private investor in October 2009. We put in a new driveway, new front and side porches, replaced damaged siding, painted entire exterior, installed new landscaping and sprinkler system, and conducted termite and other pest work. The improvements eliminated an eyesore from a historical block in Oak Park. We put the property for sale to test the market and ended up selling the property at a contract price of $88,000. As we had initially estimated selling the property at $90,000 in 4 years we decided to sell.
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8917 Rosetta Circle, Sacramento, CA
Home Details: 3 bedrooms, 2 bathrooms
Neighborhood: Rosemont
Purchase Price: $115,000
Rehabilitation Cost: $15,150
Sale Price: $166,000
Hold Period: 2 months
Return on Capital: 17.5%
Alto Capital purchased the home under a short-sale agreement with Wachovia Bank. We added an additional bathroom, making the home a more desirable 3 bedroom 2 bath residence, and installed landscaping throughout the exterior. During the rehabilitation process of the home, two US Veteran neighbors approached us about bringing a responsible homeowner to the block. We found that in Charles Watts, a soldier who had been looking for months for a home in a good neighborhood where he could leave his wife Christine and soon to be born child if deployed overseas. He had struggled to find a seller that would accept VA financing. We felt he would be a perfect fit for the block and accepted his offer over multiple other comparable offers. We have since purchased the home across the street, 8916 Rosetta Circle, and look forward to continuing to revitalize the Rosemont neighborhood.
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3907 Wildrose Way, Sacramento, CA
Home Detail: 3 bedrooms, 2 bathrooms
Neighborhood: Rosemont
Purchase Price: $125,000
Rehabilitation Cost: $7,300
Sale Price: $165,900
Hold Period: 3 months
Return on Capital: 21.0%
Alto Capital purchased the home under an off- market short-sale agreement with Wachovia Bank. We represented the homeowner to the Bank and were able to get them $5,000 in cash to start their new life. Additionally they avoided foreclosure and the Bank paid off a $9,000 judgment against them, salvaging their credit. This created a win-win situation for all parties involved; we obtained the property below market value; the homeowner was able to move forward and actually received more money from this transaction than what they had originally put as a down payment; and Wachovia was able to write the property off their balance sheet.
We have added fresh paint, carpet and landscaping and the home is currently under contract to a first time homebuyer.
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3824 13th Avenue, Sacramento, CA
Home Detail: 3 bedrooms, 2 bathrooms
Neighborhood: Oak Park
Purchase Price: $55,000
Rehabilitation Cost: $9,300
Sale Price: $95,000
Hold Period: 2 months
Return on Capital: 30.2%
Alto Capital purchased this REO home from Deutsche Bank in January 2010. We converted the formal dining room to a 3rd bedroom, remodeled the kitchen with granite countertops and installed a new HVAC system. When we put the home back on the market we received multiple offers from both investors and homebuyers. One homebuyer sent us a handwritten letter explaining the difficulties of acquiring a home with financing while competing with all cash investors and how he wanted to achieve his own American Dream. While we had all cash offers, we loved his story and his offer was the highest. We decided to take the risk of accepting his offer and it worked out well for all parties involved.
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850 Price Ct, Sacramento, CA
Home Detail: 2 bedrooms, 1 bathroom
Neighborhood: Del Paso Heights
Purchase Price: $45,000
Rehabilitation Cost: $0
Current Rent: $700
Cap Rate: 11%
Alto Capital purchased this home in a Short Sale in April 2010. The property had fallen out of escrow and the selling broker knew that we could make an all-cash offer and close quickly, so she approached us to purchase the home and keep the homeowner from a foreclosure. The homeowners were responsible people who had simply bought a home they couldn’t afford. They had taken great care of the place and were thrilled that we allowed them to stay at a rental rate that fit their budget.
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3913 35th Street, Sacramento, CA
Home Detail: 2 bedrooms, 1 bathroom (front unit); 1 bedroom, 1 bathroom (back unit)
Neighborhood: Oak Park
Purchase Price: $47,500
Rehabilitation Cost: $38,000
Current Rent: $1500
Cap Rate: 14.1%
We acquired this REO property in October of 2009 from First Federal Bank for $47,500, after it had previously fallen out of escrow at a contract price of $70,000. This same property sold for $250,000 in 2005 and $129,000 in 2002. After $38,000 in improvements, the front unit is rented for $750 per month and the back unit is rented for $750 per month. We’ve had to work with the City of Sacramento to bring this property to good standing and up to current codes. The work included obtaining building permits, design review approvals, and 2nd unit approvals. Working with the City of Sacramento can be difficult and slow at times, but has proven to be a valuable experience for this and other projects.
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3841 13th Ave, Sacramento, CA
Home Detail: 2 bedrooms, 1 bathroom
Neighborhood: Oak Park
Purchase Price: $32,000
Rehabilitation Cost: $2,500
Current Rent: $700
Cap Rate: 14.8%
Alto Capital purchased this Fannie Mae Homepath property out of foreclosure in May 2010. The home was an old craftsman bungalow that was listed as a 1 bedroom, detracting attention from investors and homebuyers, but having owned a home down the street we became interested. It turned out the dining room had long been converted to a second bedroom with a closet. The home needed a few cosmetic fixes, which we are currently working on. We expect it to rent for $800-850 per month.
* Return on Capital includes all expenses associated with selling property