Oakland, CA · Member since 2015 · 44 posts · 32 votes
Hello BP,
I currently work with a Bay Area Wholesaler, and soon I hope to start up my own wholesaling business in order to raise funds for investing. Here is my concern: I am not confident there are many motivated sellers left in West Oakland, which is where I would like to concentrate my efforts. The market here is so hot! It seems the majority of homeowners here are aware of the gold nugget they have in their hands, and will not settle for anything less than market value. Home prices are rising fast, Victorians are being flipped left and right, and the West Oakland Specific Plan will be underway soon.
Since I would like to focus my energy in West Oakland, would it be wise to get my real estate license and become a salesperson rather than seeking highly motivated sellers in hopes of wholesaling properties?
I do understand that no matter what path I chose, there will be lots of hard work and sweat equity involved. I do not want to know the "easier" path, but rather the more efficient path with regards to doing business in West Oakland.
This is the market that interests me most, and I would like to focus on understanding my niche market to become an expert in my area.
A few things, although I could never respond to everything in your post: (and I think you will be very successful if you continue..)
#1) Damn! Good job! You've done more research than 99% of BP members on any area, and at least 50% of serious investors about the underlying framework of zoning, let alone the WOSP plan.
#2) You seem very sharp and diligent. Looking for a niche play. And into Oakland! And West Oakland! I'd like to sit down and buy you lunch next time I'm back in the Bay! (will be back early August from my US road trip to wrap up planning for the big Summit in Oakland :) #3) I somewhat disagree with you on the enthusiasm for this W Oakland specific plan, given where we are in this economic cycle. (And I actually own property in West Oakland. Make me an offer on the property I posted and will discuss with my partner) You are talking about development POTENTIAL - not even APPROVED PROJECT PLANS - let alone COMPLETED UNITS. Hold your horses!!!!
EVERYONE HAS A PLAN UNTIL THEY GET PUNCHED IN THE FACE [MIKE TYSON?]
Unfortunately, Oakland has been surprise punched too many times. Go look back at the history of failed rezonings and redevelopment plans for Oakland, let alone West Oakland. Get me on city council, and I will create you a great spreadsheet with lots of great numbers. Each re-entry of gentrification, then capitulation. Every economic downturn brings some pain (although the floor will be higher this time - I agree, things will always be better than the last bottom almost certainly).
I won't even get started about the political difficulties of development. One of my buddies working on that Eastlake development project across from 1200 Lakeshore on International and 1st got burned so many times by the public.. Despite the seller, some of those development issues will certainly exist. Despite Mayor Libby Schaff and the city council being generally on board with the balance of development and existing tenants (and having a great choice in who to kiss ;) - it's not that easy..
...it is still costly to get big projects going in Oakland.. and a lot of hurdles before you know if you'll get there (can provide another reference for that)
Go listen to some gunshots down by the projects, or hang out with the homeless/recycling crowd at the little mini triangle park on the corner of 32nd & San Pablo. Go drive through West St, not far from uptown, where I had to turn around last time because the dudes in the middle of the street would rather have this white boy turn around his car than stop their dice game on the blacktop.
The tech yuppies from SF (and yes, the incoming UBER workers before I have to hear it again..) are going to start wondering why they are paying $3k+/mo for an apartment or $500/sq ft for a condo-ized 100-yr-old duplex apartment when the homeless are smashing their windows on their car and the hood folks are blasting bullets from their own cars and not always hitting the right people..
Don't get me wrong. I LOVE West Oakland in the long term. And again, I OWN PROPERTY THERE, unlike others who may opine on it. But I think the enthusiasm built into the West Oakland market, primarily as an affordable commutable alternative to SF, in addition to the upside aspects, are at least or more than baked in at this point in the economic cycle, depending obviously on how you view the future of that market. Again, feel free to make an offer on the duplex. It's right next to lofts on a 5k sq ft lot near Emeryville ;)
Having said all that, you seem super ambitious, sharp, willing to dig into the data and make it work... And for that, you will almost definitely succeed if you follow through.
Send me a text message at my number in my signature, and follow up with a call/VM, and remind me about WOSP and your W Oakland ambitions. I'll put you in touch with a few folks that are working on big things in West Oakland that have your level of enthusiasm. Hopefully you all can do great things and make a million times more money than I ever will :) They're all more ambitious than I, much like you!! :)
I'm sure you'll be very successful either way Raquel :) Just don't drink too much Oakland or West Oakland Koolaid at the wrong price ;) @Arlen Chou has been drinking up, but at a very reasonable $/sqft and on reasonably realizable income (and with much more financial capacity, no offense), so just remember there are economic cycles, plans that don't always come to fruition, and West Oakland is certainly not immune to those dynamics IMHO...
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Raquel Pea I had an office in Oakland for years on 12th... lots of changes since my days in the late 80's there.. lots of nice properties to list and sell there and Alameda etc
Lender · Elk Grove, CA · Member since 2016 · 190 posts · 94 votes
10y
Hi @Raquel Pea, have you heard of the Foreclosure Investor Tour meetup? Juan Diaz hosts people a few Saturdays a month at a house he is flipping in West/North Oakland. He's an excellent resource for that area. There's one coming up this Saturday. I can send you the link.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Raquel Pea and for a few hundred bucks you can subscribe to Foreclsoure Radar and follow all the trustee sales... hands down best tool I have ever seen in my 40 years of chasing foreclsoures.
Short of building your own custom data base and tracking system..
There are always some motivated sellers, but as you know, West Oakland is not very large, and there is a lot of attention there. The physical boundaries and low density physically limit the number of dwellings in the neighborhood, and even a few people could blanket this area in mailers. The most successful have door knockers in the neighborhood, often of similar demographics, to fish out deals. This was a pretty good wholesale deal from West Oakland, although it's from a bit back:
It came from another BP member who had someone knocking on doors. Harder to find now, but with some West Oakland properties selling at $400-500+ sq ft, the market has changed so fast that even paying last year's market price could net you something creeping close to 6 figures on a deal. But a lot of people have been creeping into North Oakland, Temescal, the hills, etc, because there is just so much more inventory to pick from (relatively speaking), and still hot markets..
I own in West Oakland & East Oakland and have furnished rentals by Lake Merritt and North Oakland just west of Temescal. So I love Oakland! And Oakland loves me! lol Oakland Mayor Libby Schaff...
You should definitely check it out. He usually does them at one of his flips, and always has quite a few going at a time. He's doing excavations, building new construction, rehabbing, you name it. Someone who's definitely getting it done! Usually on Saturday mornings.
A whole bunch of us are getting together for a big Summit in late August in Oakland also, if you all want to come check it out. It's gonna be a blast! And you can come hear @Jay Hinrichs share about Oakland in person ;)
I think seeing what other people are doing and meeting other investors and getting ideas is invaluable. But specifically to your question about marketing to motivated sellers vs becoming an agent.. Let me give you my 2 cents about what happened to me..
I was going to become an agent during the downturn to build up some cash, but realized there were so many deals available at the time - that I should spend all my time analyzing, buying, fixing, and holding whatever I could - then go get my agent's license when I did not have this unique timing/opportunity to buy up deals. So that's what happened. I didn't get my agent's license, and glad I didn't. Because I might have missed out on those deals that now support my lifestyle.
A few weeks ago, I finally signed up for the class and ordered the books. Because I don't have a bunch of unique timing/opportunities and deals to do. This, at least, is how I weighed my time and timing when considering deals vs getting an agents' license. There is much more to it. But just one person's story.. What is the best use of your time at this part of the cycle, and how will it set you up for opportunity down the road..?
Lender · Elk Grove, CA · Member since 2016 · 190 posts · 94 votes
10y
@J. Martin I’ve only been to one of Juan's meetups (2nd one this weekend) and think what he’s doing is incredibly helpful for new folks like myself. It’s one thing to talk to investors about their projects, but to be there and see the house, ask questions about his process, or certain finishes, etc., provides a higher level of exposure to a rehab that is very beneficial.
To the question you posed, “What is the best use of your time at this part of the cycle, and how will it set you up for opportunity down the road..?” I think that is what many of us are trying to figure out. Tomorrow’s opportunities will be different than 2013’s opportunities. For example, I’m not going to focus solely on REOs going forward because it’s not the best use of my time. When you talk about taking the steps to get licensed, I’m curious on how are you planning to incorporate that into your business. Are you looking to reduce transaction costs, or just expand your opportunities heading into tomorrow’s market?
Also, you stated you’re glad you didn’t have your license because you would have missed out on deals. How so? I’m trying to piece together not having your license in the last few years vs. having it now.
Btw, great pic with Mayor Schaff! Would’ve loved to hear the preceding conversation!
@Raquel Pea and for a few hundred bucks you can subscribe to Foreclsoure Radar and follow all the trustee sales... hands down best tool I have ever seen in my 40 years of chasing foreclsoures.
Short of building your own custom data base and tracking system..
Hi Jay,
Here in Santa Clara County, distressed sales are now less than 2% of the total. What are your thoughts on using Foreclosure/Property Radar in a market like this?
I wouldn't say all hope is lost. There will always be people who have issues an all-cash offer will solve. Having said that, I'm not sure what you're marketing plan looks like but if you truly are feeling the pinch of the market, becoming an agent cannot hurt.
Feel free to reach out if you have any questions on becoming an agent. I just passed the two year mark and it's been an interesting journey so far. I'd be happy to share some of my costly failures.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Jake Knight well having grown up in Cupertino and bought my first home in Milpitas ( circa 1975) then living in Palo Alto for most of the 80's I understand fully the lack of distressed Real estate at times in santa clara county.. it was usually in East San jose barrios were you found that stuff.
what I like about foreclosure radar is the app were you can drive around and non owner occ is color coded so those of you that like to drive for dollars looking for dumps can get a real time view of who are owners who are not and such.
but I was really talking about Oakland there are foreclosure there still.
Lender · Elk Grove, CA · Member since 2016 · 190 posts · 94 votes
10y
@Jay Hinrichs I have been driving regularly but didn't know about the app. I'll use it from now on and when I go visit my family in Pittsburg/Antioch. Thanks!
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Jake Knight its very cool when you drive down the street owner occs are one color non owner are another.. real time data.. If I had a door knocking crew like I used to have years ago this would be a mandatory tool...
Oakland, CA · Member since 2015 · 44 posts · 32 votes
10y
@Jay Hinrichs Wow thanks for the info! I never heard of Foreclosure / Property Radar until now (looks like it was renamed). I'm going to get the 3 day trial, but this definitely is the tool I have been needing and looking for!
Oakland, CA · Member since 2015 · 44 posts · 32 votes
10y
@J. Martin Thank you so much for your advice. You are totally right about analyzing my current circumstance with regard to the market cycle. I definitely want to invest. In fact, I just began discussing partnering with a neighbor of mine to get into the game sooner than later. Really excited, and I'll have to think a bit more on whether on not to get licensed.
I will definitely be attending Juan Diaz' meetup, specifically the one this weekend. And the Summit sounds awesome! I definitely want to attend, if you could keep me updated / link me to more information. Again, thanks for your wise words, it has me thinking!
@J. Martin Thank you so much for your advice. You are totally right about analyzing my current circumstance with regard to the market cycle. I definitely want to invest. In fact, I just began discussing partnering with a neighbor of mine to get into the game sooner than later. Really excited, and I'll have to think a bit more on whether on not to get licensed.
I will definitely be attending Juan Diaz' meetup, specifically the one this weekend. And the Summit sounds awesome! I definitely want to attend, if you could keep me updated / link me to more information. Again, thanks for your wise words, it has me thinking!
All the best,
Raquel Pea
Raquel, the info is in the tinyURL link at the bottom right of my signature after each one of my posts on BP. @Sean OToole is the bright and data-driven founder of (formerly Foreclosure Radar) Property Radar. I am a subscriber. I'm hoping to be able to get Sean to come out to the Summit in August along with Bruce Norris - two of the best CA real estate guys. What do you think Sean? Did you see the speaker list? (see tinyURL link in my profile). And thanks for the shout out @Jay Hinrichs
It's interesting that you say you want to evaluate your situation in regards to the market cycle, then say you want to buy something sooner than later. Is it better to buy in the Bay Area when unemployment is at its lowest? Or at its highest?..
@J. Martin, where did you choose to take the classes for the agent exam?
I am considering taking all three required courses in Merritt College this summer and get the license.
Whatever works best for you Ofer. I used Kaplan (online) because I have used them for other education training. Although I've heard First Tuesday is good. I personally would not take a class in a building, but that's because my main business goal is to not have to be physically present to do things or make money. This is the same. It's all online.. That may differ from your goals. But it's just a piece of paper to me. I don't have grand educational or networking goals associated purely with getting my license. Just another money-making tool in the tool belt.. ;)
Oakland, CA · Member since 2015 · 44 posts · 32 votes
10y
@J. Martin I understand that housing prices usually bottom after the unemployment rate peaks, sometimes even several years after. The thing is, a good friend of mine is on the West Oakland planning commission and he's shown me development plans already approved by the city. I'm sure you know just how big these development plans are... Here is a rendering by China Harbor Engineering Co. of the 8-12 story development which will surround West Oakland BART station.
This is only one of the very large developments set to happen under the West Oakland Specific Plan. There is another development near the abandoned train station on Wood Street, which is already in the construction phase, and even more on San Pablo & West Grand, as well as on 26th & Mandela Parkway. The WOSP also details "transit improvements which are to include enhanced AC Transit bus service, a street car service (stoked about this one) and other approaches, with direct links to planned pedestrian-and bicycle networks, the Mandela Parkway/West Grand Avenue employment and business center, the shopping and other existing amenities at the Oakland/Emeryville city limit line, downtown Oakland BART stations, and Jack London Square."
Below you can get a general idea about where these developments will take place, and how the land use is expected to change from the first "Existing Land Use" map to the "Land Use Overlay" map.
West Oakland has a mere population of 36,223. As seen in the table below, WOSP estimates to create 15,220 jobs within West Oakland alone at buildout (year 2035). Not only that, but the population is expected to grow in response to the Plan by 30.7%, and all these changes will happen incrementally over the next 19 years. How can the unemployment rate not continue to drop and housing prices not continue to rise? I'm sure they will fluctuate, but surely it can't be a bad idea to invest now?
The issue with waiting to invest, in my opinion, that homes are being flipped left and right. A "beautifully remodeled" property selling at market value leaves little room for forced appreciation or cash flow, and soon almost every home in West Oakland will be beautifully remodeled. My friend, Bruce, began investing in West Oakland at the tender age of 18. He is now 50-something years old, owns 40+ cash flow producing properties which he flipped himself, and even he finds it difficult to buy great deals in the area today, as an all cash buyer. The competition for good deals right now is very high, and the available inventory of investment properties is growing smaller. I don't think it will get any easier to invest here in the near or distant future.
West Oakland is definitely a volatile market, but I think it's volatility will decline and West Oakland will become more stable and predictable. Like you said, "the short story is that history says the best time to buy is when unemployment peaks and starts to improve, rather than when unemployment is running down near historic lows." I also believe that although now may not be the absolute best time to invest (8 years ago would have been prime), it is still a good and maybe even great time to invest.
Being a young and rather naive real estate lover and hopefully soon investor, I feel it's nearing my time to take the plunge and take my experiences for what they are: learning experiences! Don't you think? There are no losses when we persist and continue to adapt, and I would hate to wait for the "perfect moment" when I could get my feet wet and learn the waters. :)
Here is the link to the West Oakland Specific Plan Project Description PDF, where I pulled the charts and data from.
A few things, although I could never respond to everything in your post: (and I think you will be very successful if you continue..)
#1) Damn! Good job! You've done more research than 99% of BP members on any area, and at least 50% of serious investors about the underlying framework of zoning, let alone the WOSP plan.
#2) You seem very sharp and diligent. Looking for a niche play. And into Oakland! And West Oakland! I'd like to sit down and buy you lunch next time I'm back in the Bay! (will be back early August from my US road trip to wrap up planning for the big Summit in Oakland :) #3) I somewhat disagree with you on the enthusiasm for this W Oakland specific plan, given where we are in this economic cycle. (And I actually own property in West Oakland. Make me an offer on the property I posted and will discuss with my partner) You are talking about development POTENTIAL - not even APPROVED PROJECT PLANS - let alone COMPLETED UNITS. Hold your horses!!!!
EVERYONE HAS A PLAN UNTIL THEY GET PUNCHED IN THE FACE [MIKE TYSON?]
Unfortunately, Oakland has been surprise punched too many times. Go look back at the history of failed rezonings and redevelopment plans for Oakland, let alone West Oakland. Get me on city council, and I will create you a great spreadsheet with lots of great numbers. Each re-entry of gentrification, then capitulation. Every economic downturn brings some pain (although the floor will be higher this time - I agree, things will always be better than the last bottom almost certainly).
I won't even get started about the political difficulties of development. One of my buddies working on that Eastlake development project across from 1200 Lakeshore on International and 1st got burned so many times by the public.. Despite the seller, some of those development issues will certainly exist. Despite Mayor Libby Schaff and the city council being generally on board with the balance of development and existing tenants (and having a great choice in who to kiss ;) - it's not that easy..
...it is still costly to get big projects going in Oakland.. and a lot of hurdles before you know if you'll get there (can provide another reference for that)
Go listen to some gunshots down by the projects, or hang out with the homeless/recycling crowd at the little mini triangle park on the corner of 32nd & San Pablo. Go drive through West St, not far from uptown, where I had to turn around last time because the dudes in the middle of the street would rather have this white boy turn around his car than stop their dice game on the blacktop.
The tech yuppies from SF (and yes, the incoming UBER workers before I have to hear it again..) are going to start wondering why they are paying $3k+/mo for an apartment or $500/sq ft for a condo-ized 100-yr-old duplex apartment when the homeless are smashing their windows on their car and the hood folks are blasting bullets from their own cars and not always hitting the right people..
Don't get me wrong. I LOVE West Oakland in the long term. And again, I OWN PROPERTY THERE, unlike others who may opine on it. But I think the enthusiasm built into the West Oakland market, primarily as an affordable commutable alternative to SF, in addition to the upside aspects, are at least or more than baked in at this point in the economic cycle, depending obviously on how you view the future of that market. Again, feel free to make an offer on the duplex. It's right next to lofts on a 5k sq ft lot near Emeryville ;)
Having said all that, you seem super ambitious, sharp, willing to dig into the data and make it work... And for that, you will almost definitely succeed if you follow through.
Send me a text message at my number in my signature, and follow up with a call/VM, and remind me about WOSP and your W Oakland ambitions. I'll put you in touch with a few folks that are working on big things in West Oakland that have your level of enthusiasm. Hopefully you all can do great things and make a million times more money than I ever will :) They're all more ambitious than I, much like you!! :)
I'm sure you'll be very successful either way Raquel :) Just don't drink too much Oakland or West Oakland Koolaid at the wrong price ;) @Arlen Chou has been drinking up, but at a very reasonable $/sqft and on reasonably realizable income (and with much more financial capacity, no offense), so just remember there are economic cycles, plans that don't always come to fruition, and West Oakland is certainly not immune to those dynamics IMHO...
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
While you are debating this topic, I'm about to sell my Oakland tri-plex.
You can take massive action while studying.
Last weekend I had pre-paid to be with one of my mastermind business groups to be in Costa Rica, however I ended up in Costa Mesa.
Fixer Jay Decima held what may have been his last (3) day seminar and I wasn't going to miss this. The serious players were there.
I think Property Radar and incrediblely high-value resource. I haven't found a single subscriber who doesn't have at least one extra feature that they find indispensable, in addition to the basic valuation, open liens and foreclosure status feature. Incredible.
Hope to see you all in August and see what I hope will be my former property (for the first time, I might add).
