Hello from San Jose, CA!

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Hello from San Jose, CA!

Tom Goodwin
San Jose, CA · Member since 2017 · 7 posts · 6 votes

Hi Everyone!

I'm excited to learn from everyone here.

I'm originally from Michigan (Detroit area), but have lived in 8 states, and have called the Bay Area home for 3 years now.

My wife is amazing. She bought her first house at something like 22yo, lives frugally, prefers to have roommates and other arrangements in order to have zero rent, and is ok with living in C areas as necessary.

She has followed a trade up philosophy with her primary residences over the years (which has brought now brought us to San Jose), and used an extra cash on hand (after reserves) to further her real estate goals. She bought one house has a designated rental, but after that, every other house was bought with the intent of living it in as a primary residence (either at the time of purchase, or in the future). We also tend to prefer to rent out individual rooms (versus entire houses) in the she owns. As such, we have some decent volume of experience on the landlord/tenant front. She got her CAreal estate license along the way to give her access to MLS, access to homes for sale as she wants, and to save on commissions.

She/We don't flip per se, but (with only one exception) typically buy houses with opportunities for improvements, and then improve them while we/renters live in them, and then sell them a few years later.

I am lucky enough to have married into a mini-RE mogul ;-)

I call myself a reformed lawyer. Back in the day I did M&A/venture capital law, but got laid off during the 2009 recession, and got out of law as fast as I could. I am not actively licensed in CA, but I use my ability to analyze regulation/laws to help with our current tiny RE portfolio.

Our short term goal (2018) is to take the profits from a rental that we currently own in Sacramento (and that we plan to sell in early 2018), to buy a multi-family unit in San Jose or elsewhere in the South Bay (most likely duplex, but looking at tri- and four-plexes). We will live in one unit, rent out the others.

Longer term:

(1) I'd love to look into other real estate investment opportunities (not to eager to buy OOS, but ok with driveable places to use like Sac, Stockton, etc.). So, I hope to be a sponge here and learn all that I can. I would love to also figure out commercial RE. I hope to see if I can put my law background to use, if I can.

(2) We currently have an infant, and I'm not super keen on paying for private school. But, we are tied to living in the South Bay for family reasons. Currently we live in downtown San Jose. Great, fun area, but many are the public schools crappy. So, we are looking to find a place in the South Bay with a least OK schools that we can move to by the time our kid is in elementary school. That may mean liquidating/refi-ing some of our other RE to pull out the funds to do that.

-Tom

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Ryan D.
Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
9y
Originally posted by @Tom Goodwin:
Originally posted by @Ryan D.:

Also, the most "reasonably priced" (and that terms takes on a grossly distorted meaning out here) area in the South Bay with good schools is Scotts Valley. Everywhere else that is "affordable " has terrible public schools.

 Hi Ryan,

Thanks for the tip. I wholeheartedly agree on the "affordable" question. 5 years ago I lived in Eau Claire, WI, and we had a 4/2 house there, only 2 blocks from the downtown strip, for $75k.

Unfortunately, at least in terms of living, Scotts Valley is outside of our comfortable range. My Mother in law lives in Cupertino and my sister-in-law (with twins the same age as our son) live in Campbell (so yea, really, really cheap areas), so really we are looking at places with 20-25 mins or so of those two locations.

We have actually looked at some land that is available in the outskirts of Los Gatos (and are part of Los Gatos schools), and have thought about buying that and even building like a tiny home there at first, and then over time building out the property.

This all sounds so familiar! We (wife & I) looked into the very same thing over the last 2 years, What we have discovered is that any plot of land within Los Gatos that is flat enough to build will cost you hundreds of $K for just the land alone! I found a nice fellow willing to sell me a 0.1 acre plot for only $180k, and then I discovered the whole plot is a 45 degree slope - completely unusable! So you're basically relegated to plots up in the mountains, where you'll likely (though not definitely) need to drill a well, which will cost $50k for just the permitting & plans. Welcome to California!

We have effectively  settled on the Campbell area as well. Its a nice place to live, though the schools (like most towns in the valley with houses under $1.3M) are not good.

The Bay Are housing problem can be summed up as follows: over the last ~4 years >360k jobs have been created here, while only ~60k new housing units have been built, and the local municipalities are VERY development unfriendly. Google is also building a new campus in downtown SJ, which will further impact that immediate area. 

Silicon Valley is a wonderful, but VERY challenging place to live. We have investments in SoCal that we bought after the crash, though the cash-flow ROI one can expect from properties here is far too low for most investors, thus we continue to buy out of state. IMHO the major metro areas of the entire west coast are very overvalued now, from an investment point of view.

Its difficult at best to compare living in Cali with elsewhere in the country (we're from the east coast originally) - the way people live here is so very different. For example, there really aren't any suburbs as you think of them from the Midwest or elsewhere. Most people (with houses) have a little bit of land, but no one has a lot of it. The distribution of population density is much more flat than elsewhere in the country. 

At any rate, it sounds like we are fairly close, geographically speaking. Send me a message if you want info on schools, towns, areas of investment, etc. I'd be happy to share what I know. 

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Welcome, @Tom Goodwin.

    Pretty impressive that your wife has been doing that since she was 22!

    0Reply
  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    9y

    Hello @Tom Goodwin, welcome to the site! It's great to have you here. 

    BiggerPockets
    0Reply
  • Bryan Pham
    Rental Property Investor · Oakland, CA · Member since 2016 · 602 posts · 250 votes
    9y

    That's impressive @Tom Goodwin! If you are free in the Bay, let's sync up over a cup of coffee! 

    0Reply
  • Matt Motil
    Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
    9y

    Welcome to BP Tom! Good luck

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    9y

    @Tom Goodwin

    Welcome to the BP family! Great that you joined the site! Here are some recommendations for you:

    Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet
    Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
    Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
    Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

    If you wish to tag someone in the conversation on the forum, type @ followed by their name and then select the name of that person which should appear below the comments box. He or she will be notified of being tagged so that the conversation will continue.

    Wishing you the best!

    0Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    9y
    Hi Tom, welcome to the world of RE investing! I'm in San Jose also (have lived in California for more or less the past 15 years), & have been investing here for the last decade or so. I recommend you closely examine the performance metrics for investing in multi family in the Bay Area. If you are looking for cash flow, your ROI here is going to be very very low. If you are looking for appreciation, that is more speculation, and given how over inflated the housing market here is at the moment I advise you consider what would happen if your purchased & your value suddenly declined by %25. Consider this: when you are buying for cash flow (and this is the only reason I would ever advice people to invest in residential RE) you are basically purchasing a revenue stream. As you move up in area class (D to C to B to A), and as you move up in market valuations (Sac to SJ for example), the amount of money you have to pay to buy $1 of revenue increases, sometime quite dramatically. For for example, housing costs here are more-or-less 2x (& I'm using Very round numbers to illustrate the point) what they are in say, Sacramento, BUT rents here are not 2x, they are less than 2x. So, for comparable properties in both areas you'll pay twice as much to buy that same house here, but you won't get twice as much revenue, so your ROI will less.
    0Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    9y
    Also, the most "reasonably priced" (and that terms takes on a grossly distorted meaning out here) area in the South Bay with good schools is Scotts Valley. Everywhere else that is "affordable " has terrible public schools.
    0Reply
  • Tom Goodwin
    OP
    San Jose, CA · Member since 2017 · 7 posts · 6 votes
    9y
    Originally posted by @Ryan D.:

    Also, the most "reasonably priced" (and that terms takes on a grossly distorted meaning out here) area in the South Bay with good schools is Scotts Valley. Everywhere else that is "affordable " has terrible public schools.

     Hi Ryan,

    Thanks for the tip. I wholeheartedly agree on the "affordable" question. 5 years ago I lived in Eau Claire, WI, and we had a 4/2 house there, only 2 blocks from the downtown strip, for $75k.

    Unfortunately, at least in terms of living, Scotts Valley is outside of our comfortable range. My Mother in law lives in Cupertino and my sister-in-law (with twins the same age as our son) live in Campbell (so yea, really, really cheap areas), so really we are looking at places with 20-25 mins or so of those two locations.

    We have actually looked at some land that is available in the outskirts of Los Gatos (and are part of Los Gatos schools), and have thought about buying that and even building like a tiny home there at first, and then over time building out the property.

    0Reply
  • Ryan D.
    Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes
    9y
    Originally posted by @Tom Goodwin:
    Originally posted by @Ryan D.:

    Also, the most "reasonably priced" (and that terms takes on a grossly distorted meaning out here) area in the South Bay with good schools is Scotts Valley. Everywhere else that is "affordable " has terrible public schools.

     Hi Ryan,

    Thanks for the tip. I wholeheartedly agree on the "affordable" question. 5 years ago I lived in Eau Claire, WI, and we had a 4/2 house there, only 2 blocks from the downtown strip, for $75k.

    Unfortunately, at least in terms of living, Scotts Valley is outside of our comfortable range. My Mother in law lives in Cupertino and my sister-in-law (with twins the same age as our son) live in Campbell (so yea, really, really cheap areas), so really we are looking at places with 20-25 mins or so of those two locations.

    We have actually looked at some land that is available in the outskirts of Los Gatos (and are part of Los Gatos schools), and have thought about buying that and even building like a tiny home there at first, and then over time building out the property.

    This all sounds so familiar! We (wife & I) looked into the very same thing over the last 2 years, What we have discovered is that any plot of land within Los Gatos that is flat enough to build will cost you hundreds of $K for just the land alone! I found a nice fellow willing to sell me a 0.1 acre plot for only $180k, and then I discovered the whole plot is a 45 degree slope - completely unusable! So you're basically relegated to plots up in the mountains, where you'll likely (though not definitely) need to drill a well, which will cost $50k for just the permitting & plans. Welcome to California!

    We have effectively  settled on the Campbell area as well. Its a nice place to live, though the schools (like most towns in the valley with houses under $1.3M) are not good.

    The Bay Are housing problem can be summed up as follows: over the last ~4 years >360k jobs have been created here, while only ~60k new housing units have been built, and the local municipalities are VERY development unfriendly. Google is also building a new campus in downtown SJ, which will further impact that immediate area. 

    Silicon Valley is a wonderful, but VERY challenging place to live. We have investments in SoCal that we bought after the crash, though the cash-flow ROI one can expect from properties here is far too low for most investors, thus we continue to buy out of state. IMHO the major metro areas of the entire west coast are very overvalued now, from an investment point of view.

    Its difficult at best to compare living in Cali with elsewhere in the country (we're from the east coast originally) - the way people live here is so very different. For example, there really aren't any suburbs as you think of them from the Midwest or elsewhere. Most people (with houses) have a little bit of land, but no one has a lot of it. The distribution of population density is much more flat than elsewhere in the country. 

    At any rate, it sounds like we are fairly close, geographically speaking. Send me a message if you want info on schools, towns, areas of investment, etc. I'd be happy to share what I know. 

    1Reply
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