Is it possible to buy a cash flow property in the Bay Area?

[Anthony Barbato]

Hello,

I am planning on buying a 4plex property in the Bay Area using the 3.5% FHA loan on Jan 30th 2020. When I look for cash flowing properties, however, none of them have enough rent income to cover the debt service and expenses using the Bigger Pockets cash flow formula that I have included in the link below.

3420 Carlson Blvd:

https://maxebrdi.paragonrels.com/publink/default.aspx?GUID=3710d426-464b-44a0-925a-dd3302c8787f&Report=Yes

Link to deal analysis calculator, both FHA and conventional financing:

https://drive.google.com/file/d/1-uWNXgtOPKqt0Vx7I...

Is it possible to find a 2-4 unit property in the Bay Area that will cover debt service and expenses? If so, please include examples.

[Frank Wong]

No, you can't buy cash flowing 2-4 property in the Bay Area. Prices went way too high and grew faster than rents. You certainly will never buy cash flowing property in the Bay with 3.5% FHA financing. The financing and size of the loan amount will be too high. Unless you got an absolute steal and stole the property from the owner but lets work with reality which is no.

Is it possible to find value add and grow rents in East Oakland and cash flow? Sure its possible but very hard to accomplish and you ain't doing that with 3.5% down.  Sorry to burst your bubble but that's the reality that we live in the Bay.  

FHA 3.5%, in general, will be very hard to cash flow not just in the Bay Area but everywhere in the country. The debt service is just way too much to make any positive money each month. Just run the numbers. What you are paying for each month in negative income is to get your feet in the door when financially from a savings standpoint you are not ready or should buy.