Single Family with low GRM in West Oakland?

[Sudeep Jain]

To introduce myself, I am a valley engineer who is tired of working on software and wants to put his money to work. Towards this end, a few weeks ago, I started looking at investments in the bay area. Since this is my first investment and I have no experience in screening tenants, maintenance etc., and I really want an investment, not a second job. :-)  

Looking at SFRs in West Oakland area, the GRMs I am able to calculate are around 5.6% (e.g. gross annual rent of 36,000 on a purchase price of 657,000). My reasoning behind the SFR was:

a. SFRs in that part of the city are a limited commodity, where as a lot of condos can be built vertically and compactly.  

b. No rent control on SFRs.

c. Can do OMI eviction on SFR (though I hope it never comes to that).

d. Rents will be so high that it will make sense for a renter to buy their own in a few years. 

e. Really no other place for people in love with SF to go to. 

The rents just about cover the mortgage and taxes. This means I will only have internal returns for a while, and Ill have to rely on appreciation for the investment to make any sense. Am I missing some crucial piece of information here?

One question I have is, how close to BART is close? Is an SFR about a mile away from BART close enough?