All Forum Posts by: Calvin Kwan

Thanks, Minh!  

If I wasn't a first time buyer, I'd definitely be more gung ho about Property B.  My main concern is that there are too many unknown variables for someone like me with very limited experience.  Property A just seems more like a safe bet for a first investment.  Ugh... why doesn't it sound like I'm talking myself into Property A...

Trying not to go out of state on my first investment. Getting good CoC in the Bay Area is rough!

Hey Guys!

I have a bit of a dilemma.  There are 2 properties that I am interested in with different offer due dates.  Here are the key details using the BP rental calculator!

Property A:

Monthly Cashflow:  $516

CoC: 5.04%

NOI: $32,203

Offer Due: 2/1 (Tomorrow)  

Notes:   This is a turnkey property in a decent up and coming neighborhood.  I would be able to put tenants into the units on day one.  Seller renovated this property before putting it to market.  I would be putting my counter offer on this property but it's pretty close their first counter.

Property B:

Monthly Cashflow:  $1,234.66

CoC: 8.47%

NOI: $38,157.00

Offer Due:  2/12

Notes:  This is a total fixer.  There is NO inspection report available, but I heard some contractors say it would take about 30K/4 weeks or so to bring up to rental standards.  I doubled this estimate for my calculations.  Great location!!!

I REALLY like Property B and see tons more potential in it.  The problem is in the timing.  I can pass on Property A, but if i get outbid on Property B, or the inspection comes up with major issues, I would be left with nothing.  I could offer on A, but if B sells for less than my target price, I would be kicking myself for a while.  

How do you guys handle situations like this?  Play it safe w/ A, or risk it with B?  

By the way, I'm a newbie investor, so please forgive me if I'm thinking about this all wrong!

Thanks!

Calvin

 Buy and holds!

So I'm trying to land my first deal and I find this great duplex vacant in Oakland.  Asking price is within my budget so I offer 5% above asking.  Selling agent comes back with a counter at 22% above asking with removal of appraisal and other contingencies.  They also let me agent know there were 14 offers, 2 being all cash.  Apparently they sent the counter offer to everyone.

Anyway, I go up from what i already thought was a strong offer to 12% above asking and removed the appraisal contingency.  Still no dice... i lose the deal.  My agent ran the comps and this duplex is not worth the buyer counter price, or even my counter price.  I'm a bit shocked that competition is so fierce and prices are so crazy.  I'm also left wondering if I should just wait until the market cools down a bit (if it ever does)...

Just wanted to vent.  I'm sure as I submit more offers, i'll get used to this feeling.

Message sent!  

Thanks,

Calvin

Hi Everyone!

I'm looking at my first deal in the Northern CA area and wanted to get your feedback.  As you guys may know, the Bay Area housing market is hot, and deals using 1 or 2 percent rule have been extremely tough to find.  I used the rental analysis tool and here are my results...

Purchase Price:  $625K/ Duplex

Monthly Income:  $4,800.00

Monthly Expenses:  $3,637.07

Monthly Cashflow:  $1,162.93

Pro Forma Cap Rate:  5.89%

NOI:  $41,542.00

Total Cash Needed:  $184,875.00

Cash on Cash ROI:  7.55%

Purchase Cap Rate:  6.39%

Vacancy: $240

Repairs: $240

CapEx: $480

Insurance:  $100

P&I:  $2298

Property Tax:  $278

The numbers look pretty decent and the area is up and coming.  Comp rental units are going for 2400-2600 in the area.  The challenge is that the property is a probate sale (no court confirmation needed).  The current tenants are relatives of deceased and have been difficult to work with.  The listing agent isn't allowing an inspection unless an offer is submitted.  From the outside, the place looks like it'll need some cosmetic repairs, but who knows until we look inside.

So my agent is suggesting I submit an offer at full price with several conditions - 1) offer is subject to inspection and 2) tenants must vacate at the close of escrow.  Submitting at full asking price will get us into the property for inspection, ahead of those with lower offers.  She is assuring me that there is no risk, since the offer contains the inspection condition. The second condition allows me to rent the units at market price once I take ownership.  Does this all sound correct and possible?

Would love everyone's thoughts!  I really want to get into this area and these are the best returns I've found so far.

Thanks,

Calvin

Hey Eric,

I'm a new investor in SF as well. I worked at FB too, but many moons ago. I'm currently looking at buy and hold properties in the East Bay.  Let me know if you want to connect. 

Thanks,

Calvin 

Hi Everyone!

I'm a newbie investor and starting the search for my first income property in Oakland, CA.  I'm been eyeing the West & North Oakland area where things are gentrifying and prices/rents are going up quickly.  I can afford duplexes in an up-and-coming area but the returns aren't too spectacular.  The potential seems to be there though.

I just chatted with my agent and she presented me with opportunities outside of my search area that are producing good returns, but don't seem to have the great growth potential.

As my first income property, do I go with the numbers that make sense, even though the area is less desirable, or go with an up-and-coming area where the current returns aren't great, but the potential is.  I'm also afraid of being priced out of up-and-coming area down the line, so I don't want to miss out.

Would love your thoughts!

Thanks,

Calvin

Hi BP Community!

I'm a newbie investor in the San Francisco/East Bay area.  Looking for my first income property to create passive income.  Just got a loan approval and starting the search!

Looking forward to chatting you all and connecting with other area BP'ers as well.

Thanks!

Calvin