Is it good to buy a investment SFH in bay area today?

[Zhenhua Y.]

I understand we've discussed the same topic again and again. But, is it still good to buy an investment SFH in bay area (south bay, specifically) today for appreciation purpose?

The reason I'm asking is because of bay area's appreciation% record. Even the cash flow will stay negative for a long time, but ROI may beat the cash flow properties in the long run.

For example, assume that we have 500k cash today:

Case 1: buy a 1.5M SFH in south bay. Based on the appreciation% record in the past 5 yrs. The property will profit 1.5M (~100%) after 5 yrs, minus the loss from negative cash flow.

Case 2: buy cash flow properties in the other locations. The cash flow is ~40K/yr (CCR=8%). They only profit 200K after 5 yrs, it's far less than a SFH in south bay.

[Amit M.]

@Matt Mainini has it right! (It’s not easy, but stay the course.) That’s exactly what I did. I’m just adding value (to the tune of $2.4 mil+) to my last three buildings purchased and I’m done ✅. Then it’s just property management, or hand it off when I don’t want to do that either. 

Thanks San Francisco Bay Area real estate. You’ve been awesome!