All Forum Posts by: Ambuj Punn

I've noticed in general that a lot of SFH have unpermitted units (studio or 1 bed/bath). I also know that it is quite common in SF and Oakland to rent these out to folks who are ready to pay rent due to the lack of affordable housing in the area.

Is it possible to rent out an unpermitted unit? Is there a way you can be legally protected by disclosing it in the rental papers or another way? I'd like to one day own a SFH and build an ADU on there but some that have already built one look enticing, however not many are permitted. How do landlords who rent these unpermitted units manage their tenants and rent? Or would the general suggestion just be to work with the city to legalize it?

@Brian Garlington no worries, that makes sense. I do thank you for the knowledge you shared with me about the section 8 tenants and more. I'll continue to be more active in the BP community and hope to keep conversing with you! Thanks again.

@Brian Garlington thanks for the tips on the section 8 tenants, that is great knowledge.

Interesting, do you believe that prices will come down when SIP is lifted? I was assuming that when sellers get back on the market, and buyers able to leave their houses - the demand would also increase and going back to the buyer's market the Bay Area has known to be in recent years (high demand, low overall supply).

Do you still think its a good time to buy? I've been seeing transparently priced properties as of late and my realtor has mentioned that many are receiving less offers than before thereby decreasing competition and the inflated prices you see after bidding wars.

Thanks for the warm welcome @Brian Garlington! Thanks for pointing out the great insights and tips in the Oakland/Bay Area market. You're right, since we'll be getting a primary residence loan we'll have a 1 year requirement to live as owners in the new property so after a year we'd be able to rent it out before moving onto a new property (hopefully).

When you mention the flattening of the appreciation curve and along with the unknowns of the current pandemic, do you think that after shelter in place is lifted the real estate market will come back to life a bit more? My hypothesis is that when SIP is lifted, sellers will get back on the market after waiting months and increase inventory and previously worries buyers will also come back to the market generating demand and competition/bidding wars. When this is happening, due to bidding wars and raised competition, properties would start selling for slightly increased inflated prices (not like the high we were seeing in January) - thus also helping appreciate houses bought during the SIP. Any thoughts on this reasoning?

Along with the fact that the rental market is quite strong and will continue to get stronger as you mentioned, I'm hoping this strategy of purchasing during these strange times can still lead to something fruitful.

Thanks for the tip on Section 8 residents! I wasn't aware of that - are they 100% government backed?

PS. I've tried to post a picture so many times on my profile but BP just isn't working!

Hello BP!

First and foremost, hope everyone is staying safe during these strange times.

I've been a long time lurker and a listener to the podcast and finally decided to create an account and become more active on this vibrant community. After renting for a little bit, my brother and I have decided to team up and pursue real estate investment in the bay area. We're in the tech industry and have saved up a bit of money and were hoping to purchase our first property.

We were thinking to purchase a SFH or a MFH as a primary residence with a primary residence mortgage, live there for a year, build equity and let it appreciate, and then after a year rent it out and move to another property to continue the house hacking.

We've been able to find decently priced SFH in Oakland that are ready to move into in which we could call home and hold onto for a year before renting it out (generally in nicer areas of Oakland). At the same time we've found MFH in a bit not as nice areas of Oakland (less maintained houses, not as new renovations, etc) but the prices have been incredible compared to the more desirable areas. Since we'll be living there for a year, we'd like to live in a decent neighborhood with a bit of focus on lifestyle rather than immediate house hacking to begin with. Initially, we won't be making any cash flow for the first year which we're okay with but after that we plan to rent it out to start the cash flow process (we're doing our due diligence by doing the calculations and using rentometer to make sure our rental income would offset our mortgage).

With our lifelong goal of FI, what would you recommend we do? Does our plan of buying a property in a more desirable neighborhood (whether its SFH or MFH) as a primary residence, living in it for a year, letting it appreciate, and then renting it out and continuing the process sound like a good idea for beginners in this market?

Looking forward to your replies!