Bay Area Investing Metrics & Locations

[Edward Ruan]

So I've been looking at properties all around the Bay Area for a while, and it seems pretty difficult to hit the 1% rule anywhere I would want to actually live for a house hack. The closest option I'm seeing is maybe Richmond.

Is there a better location I might not be thinking of? Should I just lower my metrics so that other properties are also viable? As background, looking to buy and hold. Thanks in advance!

[Darius Ogloza]

In Bay Area investing in particular, looking to your total expected return has been the truest historical measure of value here.  The main components are cash flow, mortgage reduction and appreciation over [your expected holding period].  The latter component is necessarily speculative but it has been a persistent feature of Bay Area investing for well over 50 years.  Every decade, the doubters have called the end (AIDS crisis, Loma Prieta earthquake, dot.com implosion, Great Recession, etc) but every decade the Bay has come back swinging, growing in influence and wealth.  Looking for deals based day 1 cash flow (1% rule) will land you in Richmond, maybe parts of East Oakland or some unabomber shack up in Mendocino County but doubtful.