Oakland MF -- how much over asking?

Question

I assume multi-families in Oakland are going over asking, but how much over asking is expected in the current market?

Looking at a property in Oakland area near Piedmont, and it's listed as a side-by-side duplex.

Thanks,

Sandy

Calvin Kwan · Answer

Much to unpack here. The property has been on the market for 48 days, and there's probably a reason. There's an existing tenant and that will probably drag down the price (depending on his existing rent). It is also listed as a duplex, but there's also a studio in the basement - I'm guessing it's un-permitted, otherwise it'd be listed as a triplex. Not sure what your investment strategy is, but there's not much opportunity to add value here as an investment. If you plan to OMI and maximize return, you may still not get much cash flow, if any, given the asking price.

As to your original question about asking price, if this were me and I wanted this house for whatever reason, I wouldn't offer asking price. I'd offer somewhere 10-15% below given the info that I have. If someone offered asking already, I'm guessing they would've taken it.

As to your original question about asking price, if this were me and I wanted this house for whatever reason, I wouldn't offer asking price.  I'd offer somewhere 10-15% below given the info that I have.   If someone offered asking already, I'm guessing they would've taken it.

Calvin Kwan · Answer

Good luck!  Don't be afraid to offer less than asking - it's definitely possible.  I got both my MFs in desirable Oakland neighborhoods under asking.

Stephen G. · Answer

Great question. If I were considering a 7 figure home purchase with tenants in place already, I would call Daniel Bornstein for his legal guidance here. He is the most up to speed on current policy with COVID, etc.

I did exactly this for my duplex purchase and his time was invaluable.

Sandy Metivier · Answer

Thanks @Stephen G.

and thanks @Calvin Kwan. Not looking for short-term cash flow investment here, more of an extended/combined family move-in situation so the news that it's not over-priced and not as competitive due to all those reasons that make it less investor-friendly may actually work in our favor here. Fingers crossed!

Appreciate all the advice and insights, as always.

Stephen G. · Answer

Sandy - be prepared that Oakland realtors typically lis 20-50% below expected close price to drive buyer anxiety and competitive bidding. My building closed 40% over list price.

Assuming you're used to this already, pricing depends on the exact location, unit mix (two 1b units vs two 3b units?), vacant vs protected tenants, etc.

Brian Garlington · Answer

I would definitely not offer asking prince on this one once it went past that 30 day mark of being on the MLS. Looks like the listing ultimately got canceled anyway.....looks like there still is a vacant unit here though.

Jennifer Jo McCallon · Answer

I agree with talking to an attorney- I use Alan Horowitz. There are many options in landlord tenant attorneys in Oakland. There is no rule of thumb in real estate pricing in Oakland. Most of us price below market to drive offers, but not everyone does. Your best bet is to find one agent who is a good fit for you, and work with that person exclusively. As a buyer, your agent is paid by the seller from the proceeds, so no need to jump around. Not all agents like to double-end deals, and most really great agents will not double-end unless it really makes sense- they will refer out to a buyer's agent. You need a relationship with a person who can answer these questions for you on each property and sort through disclosures with your best interest in mind. I also highly recommend taking a class in property management- I tool the CAA class at SFAA a few years ago and it has been very valuable training.

Frank Wong · Answer

I would not assume that all multi units will sell over list price. You will need to do a full evaluation of the property before making an offer. Some listing agents will list low to create a bidding environment some will list over market. Each deal is different.

Arya S. · Answer

@Stephen G. Perhaps this is the strategy on 4 units and below. But in the true MF world (5+) world, deals are regularly closed well under market. I bought a 14 unit in West Oakland earlier this year for $350K under list. However, it was on the market for 9 months.

Sandy Metivier · Answer

Yeah in this case, one unit is open. So either myself or my extended family can move in to the open unit. Since both me and a family member in my extended family will be on the mortgage as co-owners, we are two families that need to move in. So in that case, can we OMI the tenant occupied unit?

@Calvin Kwan @Stephen G.

Oakland MF -- how much over asking?

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