Wholesaling in San Francisco

[Gregory Hodges]

Im thinking of doing some wholesaling in San Francisco does anyone have any experience doing that there my profits are just to thin to keep wholesaling here in South Carolina. Thanks

[Amit M.]

I'll third what has been said- there should almost be a biggerpockets/Bay Area edition, as not only are our numbers so radically different, they are actually counter intuitive to the rest-of-country investors. Months ago I remember posting about a typical SF deal, only to have people pleading with me; I think it got the worse deal imaginable award or something!

The bottom line is that you need serious money to make money in the Bay Area. It's almost impossible for a starting investor to get in unless you won the lottery, have a trust fund, rocked out an IPO (choose one.)

But for those of us who are already players, accessing existing equity is a great advantage. It's basically trading cash flow for future appreciation. In SF rents have been at an absolute tear. Example: an 800 sq ft unit in the über-tech-hipster mission district rented for $2200 in early 2011. Just re rented it for $3500. Got to admit it was rather fun having people line up/kiss butt/compete. I ended up taking this sweet techie couple who threw in a $200 bonus. Some nice sushi lunches, here I come :) So it's time for me to trade in some cash flow and get another asset under my belt.

I just recently started making offers, and yes I'm shocked that even POS's in lesser neighborhoods are getting snapped up. Lots of Chinese money and established SF families and investors buying all cash. I actually think my best bet is the fool who over prices, then his bldg sits on the market 30-60 days. Sometimes they soften and you can come in with a marginally lower bid and get the deal. The smart sellers put out the teaser price, and watch punters fall all over themselves in the typical bidding war.

So I quickly adjusted my attitude from "find a deal" to "just get something that is ****ing reasonable." I have a very specific building type and neighborhood demographic that I'm targeting. It takes advantage of SF's screwy rent control laws and gentrification. I'm confident if I get what I want that it will be worth $$ hundred of thousands more over the next 2-4 years.

How about all you guys? How bullish are you on appreciation in the Bay Area over the next 2-4 years? The tech bubble/no tech bubble is the sixty thousand $$ question, isn't it!