San Francisco Bay Area/NorCal Investors - let's help out our CA friends

[Becca F.]

I've had many beginning investors message me on BP who are in the Bay Area  or met them at local meet ups. The demographics of these investors are typically high income earners, almost 90% working in tech (software engineering, tech sales, computer science, etc). Age range: 20 (future college grad) to mid 30s so all pretty young. Interestingly only talked to a few health care workers  (physicians, pharmacists, RNs). From looking up on Glassdoor or Indeed I'd estimate their tech salaries to be $120,000 (on the low end) to $400,000+ (I didn't ask them their salaries, didn't want to be too nosey). I'm not sure if these high tech salaries will continue, some of them get compensated via RSU (Restricted Stock Units)

 My suggestions were to house hack (if they're still renting) or within a 2 to 3 hour drive. If the Bay Area is out of reach with high prices, I suggested Sacramento or Central Valley - I don't know much about the Central Valley except my local agent recommended Turlock and another agent said Fresno. Stockton has been mentioned but there are some high crime areas.  And to go for appreciation if you're going to look out of state, meaning don't buy cheap Class C properties OOS for the "cash flow on paper". They have the gift of time especially someone in their 20s. Some investors I talked to are doing MTRs and STRs (this seems challenging with competing with all the other AirBnbs in CA), some are trying to do a Joint Venture and buy multi-family. 

To the experienced CA investors, where would you recommend they invest or other strategies? Maybe syndications but some of them aren't doing well and if they don't know how to vet the operator, seems very risky. 

[Balkrishna Agrawal]

Bay Area is mostly appreciation market and if you go with 20% down and financing you will be in negative cash flow for few years. 

Few areas I am personally aware of with good appreciation 

- Tracy, Lathrop, Manteca, Mountain house : All have good appreciation, Stockton has some high crime areas to watch out for. Class A/B

- Stockton, Fresno : Class B/C areas especially Fresno. Although both can have a decent cash flow 

- Sacramento, Roseville, Folsom : on the radar because of healthcare, tech, govt and insurance offices. Growing population, decent appreciation. Class A/B