All Forum Posts by: DG A.

I think AI and automation will drive some big losses in the transportation sector.  Uber is ramping up to not need human drivers anymore: 

https://www.techradar.com/news/uber-self-driving-cars

Bitcoin losses, student loan debt,  and increasing interest rates.

@Kevin fair point about not needing to look CA tax payers in the eye. Serious point,  but it made me laugh when you put it that way. Lol!

I'm here to learn, and it sounds like you are where I want to be. 

Some questions for you: 

1. What state(s) are you investing in to get those results? 

2. Are you investing out of your home state? 

3. How'd you do it in 3 years?

Robert,  I can appreciate your perspective on how tax dollars are spent. Me personally,  I'm ok taking on a slightly higher tax burden to allow an older couple to stay in their home. Agree to disagree on that I suppose. 

From an ROI perspective Oakland property has and will continue to appreciate at a rate that is much higher than out of state RE. There's an under supply of housing here, and nimby politics prevent development of housing at a rate that fixes the under supply. Definitely artificial, but unlikely to change soon.

The idea is this:  I might make $1,000/ month buying out of state in cash flow,  but I can deploy the same capital to make $3,000/ month in appreciation here in Oakland over the long term 10 - 20 year time horizon. 

I think the are other markets that appreciate at similar rates,  if not better (Denver and Seattle come to mind), but I can't use low down payment, low interest,  owner occupied financing there, I've gotta put down 20% in those markets. 

That strategy of buying here in Oakland,  owner occupying, waiting for 2 years and repeating will actually get me to $120,000/ year in cash flow (all expenses accounted for) in about 15 or 16 years. 

I wouldn't break any speed record to financial independence,  but I'd definitely get there. 

Hi Folks, 

I'm wondering if anyone else out there has pondered this. 

In Oakland, if an owner moves into a property, and that property is 3 units or fewer, then after 2 years of the owner living in one of the units, the property is no longer subject to rent control and all rents can be adjusted to market rate. I am going to be exempt from rent control pretty soon here, so I'm going to be able to raise the rents in my duplex to market rate. Market rate is nearly double what the tenant is paying now, and I suspect the tenant will choose to leave when that happens. 

If I want to invest in real estate, the only strategy I've identified that works for me with my level of income is to buy fully tenant occupied duplexes or triplexes at a small discount, then move into one of the units, live there for 2 years and increase the rents to market rate. Then repeat this process. The only problem is I don't want to leave a trail of displaced families in my wake, as I go on buying more units over time. 

Question: Is there a way that I could transition my existing tenants into a subsidized rent program? For a hypothetical example, let's say my tenants are paying $750/month for a 1 bedroom, and the market rate is $1500/month. Is there any way a program like section 8 could come in, transition my existing tenants to their program and cover the gap between what they pay now and what market rate is? 

I actually like my tenants, they're chill people, they don't bother me and they even pitch in doing yard work. They're great. I just don't want to pay more of my own money towards the mortgage to subsidize their living there. 

Update:

I've been reading the zoning and planning code for Oakland in the evening for hours at a time to learn more about how to solve my problem of having a lot that is 33 sq ft too small to add a 3rd unit. And I found a couple of solutions:

1. Mini Lot Development - I'm still learning about this, but it seems possible to subdivide lots into smaller than normal parcels and build multiple homes on those smaller lots. I haven't finished researching this, but this Lawyer basically lays out the thesis on this approach: http://www.jgutierrezlaw.com/uploads/Subdivisions has anyone here ever done anything like this?   This is definitely happening in Oakland, see an approved development here: http://www2.oaklandnet.com/oakca1/groups/ceda/docu...

2. Affordable Housing Incentives - The city of Oakland will reduce set back requirements to build on a lot, and actually increased the number of permitted units above the zoning limits if you build a certain % of affordable housing units into the building, and commit to keeping the rental units in a program like section 8 for 55 years ( see here). So option 2 looks like a path forward.  

The only problem is, the Affordable Housing Incentives only apply if you're building 5 or more units. You'd think if the city of Oakland wants to encourage the development of affordable housing, they wouldn't want to prevent small multifamily properties (that account for a lot of the housing stock here) from getting the incentives larger developers do. 

@Calvin Kwan , I wasn't even thinking about sub-dividing. But, sub-dividing might be a good way to solve this problem without having to buy land from my neighbor. 

There's relatively little information about this online. 

I found this one really good article on sub-dividing, and then using Oakland's mini-lot development guidelines as an approach to this: http://www.jgutierrezlaw.com/uploads/Subdivisions....

Is there anyone around that has subdivided their own property in Oakland?

Is subdividing something that needs to go through the city of Oakland, or is that something that goes through the county?

that's awesome!  You got a link for these companies? 

@Calvin Kwan I'm planning to build a new unit altogether.

And that unit would not be subject to rent control for the foreseeable future, since all new construction in Oakland built after January 1 1983, is exempt from the rent control ordinance. 

Gotcha, I've got about 5 parcels abutting mine. I should be able to work this out with one of em...