Interested in moving from San Francisco to Oakland

[Jose Alvarado]

Hey Everyone!

I'm Jose Alvarado, I live in San Francisco, and I'm a new member to BiggerPockets. I've been listening to the podcasts for a while now and I'm finally ready to take action. I just purchased the Pro Membership for the books and software. I believe I'm fairly knowledgeable in real estate after reading the following books but I know I don't know everything I need to before making my first purchase:

Read: Rich Dad Poor Dad by Robert Kyosaki

Read: Building Wealth One House at a Time by John Schaub

Read: The Richest Man In Babylon

Read: The Book on Rental Property Investing by Brandon Turner

Read: The Millionaire Real Estate Investor by Gary Keller

Reading: How to Invest in Real Estate with No Money Down by Brandon Turner

Going to read: A BiggerPockets Guide: How to Rent Your House by Brandon Turner

Going to read: The Book on Managing Rental Properties by Brandon Turner

I'm really interested in house-hacking in Oakland. I currently pay $1800 for rent in SF and after doing some research I could be paying ~$2200 if I purchased a home in Oakland. I would rather be putting down $2k a month in mortgage than paying rent, but my goal is to purchase a property to live in, rent the other rooms out, and produce cash-flow without paying any rent myself.

I spoke to Chase bank about a conventional loan and they provided the following results

"If you can come up with 5% down payment, we can finance up to $417,000 and with 10% down, we can finance up to $625,5000—both conventional financing with PMI (mortgage insurance)"

I also believe that I qualify for an FHA loan with 3.5% down. The mortgage banker said that I should "try with conventional first as sellers typically like to work with a more streamline financing."

Should I go with a conventional loan or an FHA loan? At the moment, I'm leaning towards getting a conventional loan with 5% down. I have enough for saved for 5%-10% down depending on the property but I'm hoping to put as little down as possible since I don't want to lose all of my savings and I'll need some extra funds to fix the property up and pay for vacancies while I transition from my current apartment to the new property.

Zack Karp recently made the following comment on a BiggerPockets forum, "Conventional is better than FHA if you have a 680+ credit score, as the blended rate and PMI cost is lower." So it looks like a conventional loan is the way to go unless someone call tell me otherwise.

I think I'm ready to start working with a real estate agent to find a property that fits my criteria. According to the banker, I can easily get pre-approved. Ideally, the property would be close to BART or MUNI so that I can get to work in SF easily. I see some great listings with 6+ beds in Zillow that seem like a great opportunity.

Is there any difference in purchasing a regular house, a house in auction, a foreclosure, or an apartment with a conventional loan?

Random question: Why are some houses with 4 or more beds listed as apartments?

Is there anything else I should do or have ready before I start looking for a property and real estate agent?

Some of the things I believe I still need to know:

• What areas to avoid in Oakland?
• Laws and regulations about owner-occupied rental properties in Oakland
• When to apply for pre-approval? Before or after I find a property?

I'm planning on contacting real estate agents this weekend so that I can start looking at some properties. If you're real a real estate agent in Oakland I would love to get in contact with you.

Thanks for the help!

Jose Alvarado

[Brent Tarnow]

@Amit M. @Eric Clayton have you guys ever been to Oakland?  That's not snarky - serious question. There are long-standing deeply connected communities, as well as new and changing communities that are far more than naive, flakey, white hipster millenials. I've really got no dog in this fight, just trying to avoid the mass stereotyping (in supercharged, loaded blog posts) of people living in a strong and vibrant town.