Bay Area Peninsula/South Bay SFH investments

[Ratesh D.]

Hi All,

Happy new year! I'm new to Bay Area real estate investment and have been looking at a few up and coming areas for SFH to either rent to hold or flip. East Palo Alto has gone up a lot given the huge reduction in crime and proximity to Facebook etc. San Jose looks set to benefit from Google's plans to expand there. Redwood City is doing well too. Newark is expanding as a cheaper gateway to the peninsula. SFH are generally in a price range of $700k-$1m which whilst crazy, are much more affordable with reasonable commute times than other parts of the area.

Appreciate community thoughts on how best to compare these or other areas for investment and strategies/experiences that folks have had. 

Thanks!

[Jeremy Lee]

Hi Ratesh,

I think there are several things to consider when evaluating markets to flip or hold. For rentals it depends if you are looking for cashflow or appreciation. There are several areas in the bay where you can get some cashflow, but these are typically cheaper areas - between Sacramento and the 580 corridor and some parts of the southbay, typically farther from city center. If you are willing to be cashflow neutral and possibly get some appreciation, this expands possible investment areas, however the most money is made in areas with high appreciation, if you can afford it.

For flips, I would typically look in areas where there are older, smaller properties. Projects can be found all over, but the highest barrier is the cash to initially purchase and rehab the properties. 

EPA has been a long time coming, since Ikea moved in the area really started to turn. I would expect the peninsula to do better than the east bay, but theres still money to be made in both locations. I don't have much advice for the next place that will explode, I wouldn't recommend betting on this as a strategy. 

My guess is the biggest barrier that would limit you is finances and locale.

Best of luck