House hacking in SF Bay Area

[Ben Rice]

Hey BP! This is my first post and I'm still very much a newbie in the REI world. I've listened to about 5 podcasts so far and I'm digging all the great info and interviews.

That being said I live in the SF Bay Area, where homes are VERY expensive and the idea of buying a 4-plex for $100k is comical. Was curious if any members could share any personal investment stories in the Bay Area or could post links to other threads or podcasts that involve the Bay Area.

Thanks!

[Arlen Chou]

@Gilbert Dominguez The original poster is from the Bay Area and my post was directed to him. I never suggested that somebody from out of state or even out of the area should invest here. That in fact would be a very tough thing to do... However, the OP asked for examples in the Bay Area, and my intent was to provide local examples to a local investor.

My first examples of what I did were from when I first started out. People were saying the same things about the Bay Area 20 years ago as they are now. People thought buying a 2 bedroom town house for $300k was a crazy price. I was fresh out of college and my first job paid $23k per year. I am pretty sure back then my salary was below average, but my long term commitment to REI was not. Scraping together a down payment is not easy now, but it was not easy back then either.

If you search my posts you will also see a recent deal that I did in Oakland for 5 units for $600k and I got seller financing!  This was not house hacking either, but then again it totally could have been. Granted the Bay Area is a tough market to find and convert deals. However, if people just give up based upon generalities, I believe that they automatically fall into the "average" mindset. 

A partner and I almost closed on a vacant triplex in Oakland that was very near move in ready for less than $500k. We walked away because we were concerned about some work that had been done on the property that looked to have been done without permits. But that could have been a houses hack for somebody getting into REI. I even posted here on BP about passing the deal to somebody who might want to house hack, got some tire kickers but nobody who wanted to engage. 20 years ago when I was young and single, I would have jumped on the deal and handled the permitting issues myself while living in the crappiest unit. This could have been a 1% property for a first time investor.

The excuses of not finding deals or not having money to start in any market are the excuses for the average Joe. Finding creative deals, and finding money to make the deals are what pull investors ahead. When I started, I had an average job, with a below average knowledge base for REI. But I had an above average desire and commitment to make it work in my back yard. If I could do it back then and make money in 2008 there is no reason that somebody with a long time horizon and a willingness to sacrifice and work hard could not do it now.

-Arlen