All Forum Posts by: David Song

CA, especially the Bay Area and other population centers, are great investment locations. The price is much more expensive than Midwest, but the yield or cap rate, particularly commercial properties, are similar to Midwest.

SFR may have a lower cap, in good area. However, if you are willing to go to the Central Valley, the price there are not much higher than the Midwest.

I only buy in CA, only in Bay Area.

Planning to sell two investment properties in CA and buy one primary residence in CA.

Property 1 is listed and expected to sell in August to September timeframe (Around 150K long term profit, total sale price around 0.85M, no loan)

Property 2 is under renovation and expected to be listed in August-September, and close around October to November (around 400K long term profit, total sale price around 1.7 M, around 0.6M loan. ~1.1 M in cash).

What is the best time to buy the replacement property? Under 45 days, I need to identify replacement property. Does that mean I need to be under contract for the replacement property? Or just put an offer into it? What if the offer is not accepted?

The replacement property value should be 0.85+1.7=2.55M or above? Can I still get a loan for this property? If so, do I have to put all the cash (i.e. 0.85 + 1.1 = 1.95M) from the two escrows into this replacement property?

Also, what if Property 2 is sold after Day 45, when the replacement property is already identified for Property 1?

Any experienced 1031 exchanger can provide some insight into this scenario? Greatly appreciated.

The rebound came suddenly amid still very high interest rate environment. Sold price above list price over 200k is normal again.

I am considering putting a house in South San Francisco onto market recently. Bought in 2020 for 1.02 m. A few weeks ago, I was estimating around 1.5-1.6m. Now, it looks like 1.7-1.9 m. This house is under some renovation with an ADU addition, after 4 years of rental. Debating whether to keep it as a rental or just unload.

I have only invested in sf Bay Area. No experience with red state investing.I did spend 5 years in columbus, Ohio. I prefer SF area over Ohio for REI.

this is not about politics, but about investment return. SF Bay Area has been the most profitable location for REI in US for the last 15 years, during which I invested. Assuming I spent the last 15 years investing in Ohio, the investment return would be significantly lower.

I will continue to invest in SF Bay Area, not in the city of SF or Oakland though.

The housing price will increase significantly in 2024 in the Bay Area.

The inventory level in San Mateo county and even east Bay Area has dropped to historical low, even though the price has not increased significantly.

This dramatic reduction in inventory is a strong precursor signal of rapid price increase.

For example, in foster city, the active SFH inventory today is down to 1 from 20-30 range.

In Hayward, the active SFH inventory dropped to below 30 from 50-100 range.

There is a huge number of buyers waiting to get into the market. With a simple projection of future rate stability or possible reduction, they have started to jump in. This has happened already, as indicated by the dramatic inventory reduction in December 2023.

The increased supply will be limited in my opinion, especially in CA due to property tax considerations.

My crystal ball says 2024 will be a high price appropriation year.

Not enough collateral. LTV too high. You can easily walk away and the investor stuck with a vacant house.