Deal Analysis Oakland Duplex

[Luke Mccandless]

I'm looking into a duplex in Oakland that will need repairs and doing a 203k loan (Market has slowed so this is possible). The payment will be $4,664 PITI and MI The lower unit will rent for $3100 and I will live in the top unit. I plan on moving out in one year and renting my unit for $2300 I realize the cashflow is not great but the property is in good area and I hope to be able to refinance the loan to lower the payment as soon as possible. I make an ok income and hope to have raises going forward. Other things to consider are how anti landlord Oakland is and with prop 10 in the works...I am not sure how much longer living in the Bay Area makes sense.

[Amit M.]

If this pans out as you expect, in 5-10 years you will have hundreds of thousands of $$ in equity, which is the Bay Area play. I’d do it if I was starting out again. At least you’re not upside down from the get go! Then refi or get a heloc 5-10 years from now and get another property. Personally I wouldn’t leave the Bay Area, as that’s what will have made your wealth in the first place. It’s not as if the Bay Area tech industry is going the way of Detroit’s auto industry anytime soon...

And, as soon as prop 10 fails to its (deservedly) miserable death, you’ll feel a lot better too!