All Forum Posts by: David Schach

My crystal ball is still under warranty so take this as 100% accurate future prediction. The SF city market will never ever crash, ever due to COVID or financial reasons etc. It wont ever happen. What people who are not from here fail to understand is that SF is a legally zoned monopoly. They aren't making more dirt, you can't build up in most areas and the immediate land to the south is garbage. What happens here every decade or so is that you get a little softening and buyers have a little less pressure and a few more options and a little more time to be picky. When this happens it FEELS like a collapse as sellers were led to believe that 10-20-50% over asking was guaranteed. So people freak out and think prices are falling when they are just not going up. Then all the data comes in and we had a little dip, 5-10-15% on median sales prices, probably dragged down by high-end condos falling the most. If you can afford to play here and have a 5-10 year time horizon you will never lose money.

Now...let me add one massive caveat to this for everyone thinking I am not as smart as I think I am.... When the next big earthquake comes, prices will collapse. I mean BIG quake, the 7s, 8s and 9s where the Marina is 50% red-tagged and freeways are flattened. When this eventually happens, and it will, all bets are off. Most people here haven't felt a real earthquake and when it comes I can imagine 10,000s of people will leave and never return. The fear of death is a strong motivator to move. And to all those people complaining about homeless, **** on the street, petty theft etc, thats all part of the charm of SF, its a feature not a bug, very few ppl will move out of here b/c SF city govt cant clean up the tenderloin or parts of SOMA.

gary, you are selling in a sellers market and buying in a sellers market. you are going to do very well on your sale but very poorly on your buy. 

if you ran your numbers adding in "rental savings" and booked that amount towards interest earning accounts etc instead of using the net difference to fund your normal living then MAYBE it could benefit you.

i am in a similar situation and i am in a WAIT AND SEE mode right now. I am actively looking but extremely picky and critical of any RE deals I am looking at. Much greater downside risk buying today than upside. You need to do what works for you, but be cautious you arent getting into a duplex that will be flat or underwater for a decade. i know people who are just coming out of the red on properties in the bay area that they bought in 2005. We can and will experience LONG runs of flat or negative appreciation in the bay area. But when it runs up, it runs fast. You are selling at peak or nearing peak for this cycle. good job!

Why would you put 700K down on that property? your return on your cash will be dismal. I would rethink that a bit.

you have to ask yourself why would a seller in todays RED HOT multifamily market hand you a building with zero skin in the game and a huge mortgage.

i have seen these happen here in the bay area on occasion and its almost ALWAYS for tax reasons. they dont want the huge CAP gains hit so they will finance over 10-15 year terms. And more often than not its an older person, retiring who wants the steady check, doesnt need all the cash at once and is getting out of the investing game.

look for grandma with a decaying apt building. shes your best bet.

I have not found any one reliable in LV to wholesale. They have just fed me MLS listings in the past.

I think its an ongoing story that will play out in many ways, some known, some unknown. The affect on real estate could be linked to water prices and flow rates. If you only get X gallons a day at crazy high prices then some people on the lower end of the scale might move out of state. BUT---- if there is a moratorium on NEW connections that could offset the demand side because supply is constrained. I can see either scenario playing out. I think the downside risk is very high, considering the crazy run up in prices up and down the state. I am getting early warnings from locals down south that the LA market might be starting to cool off. Not saying its not HOT, just not crazy HOT HOT HOT. Maybe 1 HOT, vs 3 HOTS...

 Its not that whether strategy works or doesn't. The issue is that on paper its easy to draw up, in practice much harder to execute. I think the nature of your question is wrong. Of course people have done it. You should be asking how difficult is it in todays market to purchase a MHP with no-money down, no track record, no management experience, etc. And how much time of your own personal time will it take to do it. I dont know the answers, but i would assume that its really hard, and will take 100s of hours. Might be better off using another method. 

I have run into this problem, there are a few lenders who do non-warrantable condos. try a google search. basic thing i can tell you is that as long as the ratio isnt to bad, 60/40 vs 90/10 and the loan amount is high enough 150K and up you should have no trouble. 

http://www.nonwarrantablecondoloans.net/

 All things being equal, million dollar rehab hands down. In SF thats about the only game in town. Buy for 2MIL, put 1MIL into it, sell for 4MIL. once you go outside that basic structure its really tough to make any money. low end properties are way overbought, leaving no margin for rehab. A crappy fixer can sometimes sell for more money and higher price per sf than a fully move in ready home in and around the 1MIL price point.

I know these figures sounds crazy to most people on here, but if you arent from these markets, i just suggest that you add a couple "00" to your local market and the ratios stay the same. % profit isnt that different, just a lot more cash in your acct needed to enter and when you exit even more.

never rent to pitbull owners. and second, you have no obligation to rent to anyone. just pull the ad down, ignore the emails. repost at your new higher rate.