Hello from San Jose, CA!

[Tom Goodwin]

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

[Ryan D.]

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.