Househacking in Oakland 2019 Doable?

[Mikhail Katz]

Greetings ladies and gentlemen,

So do you think it is possible to house hack in Oakland with the current market? 

I am young and single, currently living in Berkeley and working in SF, I have some money I want to invest, and I will probably do out of state, but right now I am still eligible for FHA loan and entertaining the idea of house hacking here in Oakland. I would totally do that if I lived in a more hackable area, but I thought it's impossible here, I am still not sure and that's why I am asking. Also, I am not willing to move to a total hood, but rather somewhere relatively safe within a couple of miles from a Bart station, probably not further south from Lake Merritt station and surrounding areas. I saw some 2-4 plexes within 600-800k, but not sure what the rents would be and if I'll be able to buy them with FHA/3.5% down.

Any input is appreciated! 

[DG A.]

I'm doing it right now. House-hacking a duplex. I did buy 2 years ago though. 

I am pretty sure you can still do it. 

I'm shopping for my next house-hack. It's all about finding buildings where the rents are low, as that holds down the value of the building. Another approach is to bite the bullet, spend the $6-10K in relocation fees per the no-fault eviction ordinance. Then you can take down a fully occupied building with low rents in each unit, essentially getting a relatively cheaper building when comparing to similar buildings with a vacant unit.

If you do the math, paying $10k in tenant relocation fees to bring a triplex up in value by $200K - $300K is an investment worth making all day every day. 

How are you evaluating your deals? Are you looking at banked rent increases? ... that is rent increases the current owner has the right to make but has not yet made. Those transfer to the new owner. See here: 

https://www.oaklandca.gov/resources/learn-more-abo...

"Property owners may defer applying annual rent increases up to 10 years. Rent increases that were not imposed within 10 years expire.

You should build those banked rent increases into your evaluations, and ask your agent to get you rough move-in dates, based on the estoppels in the listing agent's disclosure package. 

Hope this helps!