Alex Daredia
Watson Realty | Broker-Associate | DRE #02035436
383+ homes sold across Kern & Tulare County. Former banking professional turned Broker-Associate, specializing in strategic pricing, investment analysis, and creative financing.
In my years working with real estate investors across Bakersfield, Visalia, and the broader Central Valley, I have watched both spectacular successes and painful failures. The difference almost always comes down to avoiding a handful of common mistakes that drain returns and destroy portfolios. Here are the eight most costly errors I see — and how to sidestep each one.
This is the cardinal sin of real estate investing, and it happens more often than you might think. In a competitive market, emotions run high and investors start justifying prices that do not work on a spreadsheet.
How to avoid it: Never rely on the listing price or the seller's proforma numbers. Run your own analysis using verified comparable sales, actual (not projected) rents from similar properties in the same neighborhood, and real operating expense data. In Kern County, I use a combination of MLS data, rent surveys, and property management reports to build accurate underwriting models for my investor clients.
A good rule of thumb: if the deal only works with aggressive rent growth assumptions or below-market expense estimates, it does not work. Buy based on today's numbers and let appreciation be the bonus.
I meet investors who fixate on cap rate without understanding what it actually tells them — or more importantly, what it does not. A 9 percent cap rate in East Bakersfield is not automatically a better deal than a 5.5 percent cap rate in Rosedale. The higher cap rate reflects higher risk: more tenant turnover, greater maintenance costs, slower appreciation, and more management headaches.
How to avoid it: Use cap rate as a starting point, then dig deeper. Calculate cash-on-cash return (which factors in your financing), total return (including appreciation and tax benefits), and the internal rate of return (IRR) for hold periods of 5, 7, and 10 years. A lower cap rate property in a premium location often outperforms a high cap rate property in a challenging area over a long hold period.
Every flipper and value-add investor has a story about the renovation that went 40 percent over budget. In the Central Valley, the most common culprits are hidden water damage (especially in older Bakersfield homes with swamp coolers), outdated electrical panels that do not meet current code, and foundation issues caused by the area's expansive clay soils.
How to avoid it: Get a thorough inspection before purchasing, obtain contractor bids during your due diligence period (not after closing), and add a 15 to 20 percent contingency buffer to every rehab budget. I also recommend building relationships with reliable local contractors — in Kern County, the difference between a good contractor and a bad one can be $20,000 on a single project.
The Central Valley is not one market — it is dozens of micro-markets with dramatically different dynamics. A rental property on one side of a street may perform beautifully while the identical property on the other side struggles with vacancy and tenant quality.
How to avoid it: Drive the neighborhoods. Talk to property managers who operate in the area. Check crime maps, school ratings, and planned development. In Bakersfield, I can point you to blocks within the same zip code that have wildly different investment profiles. This is where working with a local investor-agent pays dividends — literally.
Self-managing rental properties is a popular strategy for saving money, but it is also the source of enormous frustration and financial loss for investors who are not equipped for it. Late-night maintenance calls, difficult tenant situations, eviction procedures, and fair housing compliance are real challenges that require knowledge, systems, and temperament.
How to avoid it: Either commit to self-management with proper systems (online rent collection, maintenance request platforms, tenant screening services) or hire a professional property manager. In Kern County, management fees typically run 8 to 10 percent of monthly rent for single-family homes. On a $1,800 per month rental, that is $144 to $180 per month — a worthwhile expense if it means lower vacancy, better tenants, and fewer headaches.
California is one of the most regulated states for landlords, and ignorance of the law is not a defense. Key regulations that trip up Central Valley investors include:
How to avoid it: Join the California Apartment Association or a local landlord group. Consult a real estate attorney before your first rental. Use lease agreements that are current with California law, not a generic template downloaded from the internet.
Low interest rates in 2020 and 2021 encouraged many investors to leverage aggressively, purchasing multiple properties with minimal equity. When rates rose in 2022 and 2023, some found themselves with negative cash flow and no refinancing options.
How to avoid it: Stress-test your portfolio. Can you sustain your holdings if rates stay above 7 percent? If vacancy runs at 10 percent instead of 5 percent? If a major repair hits on two properties simultaneously? I advise maintaining cash reserves equal to at least 6 months of expenses per property and keeping portfolio loan-to-value below 75 percent.
Some investors underwrite deals assuming 100 percent occupancy. In the real world, even the best properties experience vacancy during tenant turns, renovations, and marketing periods. In Kern County, a realistic vacancy assumption is 5 to 8 percent for well-located single-family rentals and 8 to 12 percent for older multi-family properties in less desirable areas.
How to avoid it: Always include vacancy in your projections. Also factor in tenant turnover costs: cleaning, painting, minor repairs, and lost rent during the marketing period. A typical turnover in Bakersfield costs $2,000 to $4,000 and takes two to four weeks. If you experience one turnover per year, that is $2,000 to $4,000 off your annual cash flow.
Real estate investing in the Central Valley is genuinely one of the best opportunities in California — but only if you approach it with discipline, local knowledge, and realistic expectations. Every mistake on this list is avoidable with proper due diligence and the right team around you.
If you are looking to invest in Bakersfield, Visalia, or anywhere in the Central Valley, my investor services are designed specifically to help you find, analyze, and acquire properties that meet your financial goals without falling into these common traps.
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