All Forum Posts by: Erik Grahn

@M.L. Dillard, how does this home look like, https://www.zillow.com/homedetails/3503-W-Browning-Ave-Fresno-CA-93711/18709535_zpid/

Enjoying reading these posts! I am somewhat optimistic that the virus will fade as quarantines continue and the summer heat gives us a helping hand. China is our canary in the coal mine and they have already seen decelerating new cases. I see the same trend hitting Europe and the US in 2-3 months time. 

The big fear I have is if this event will set off any other economic ticking time bombs that are on the brink. Industries and companies that are overleveraged or have no reserves can’t wait 3 months and will go belly up causing a domino effect. 

Another factor here is what kind of stimulus will the government pass to shore up overleveraged companies so it doesn’t cause a domino effect.

Coronavirus is just the tip of the iceberg. The real threat is from some type of credit crunch as companies default on loans. That could have an effect on the real estate market as it trickles into real estate loans.

Best case scenario: corona wanes in 2-3 months and after that things return to normal with markets partially recovering by end of year.

Worst case scenario: corona causes a cascade of defaults and this becomes a credit crunch more similar to 2008. Multiyear recovery.

Personally I have started buying stocks and will continue to buy as the market decreases.  I am in it for the long haul so either way I will make money on this!

@Erik Grahn Lot of questions and unknowns here. First, what is your budget? Can only imagine what a fourplex in SFBA costs, just knowing what a typical SFH/condo costs, unless you're buying somewhere east bay or ghetto. Imagine the mortgage on a fourplex, and if you live in one of them, you then only have 3 tenant dollars coming in. You will be cash flow negative aside from having a place to live, some extra write offs, and the primary home loan. IMO not much of a deal.

Are you single? Married/kids? Depending on answer to first question about budget and location, do you really want to live in one of said fourplex units? I know the answer to just "house hack" is super popular on this site, but anyone married with kids doesn't exactly want to move into a 2br apt in a fourplex in XYZ neighborhood. So, is that part of your personal plan? If you are single / young and willing to be flexible and move around, it does open more doors for buying and investing. 

Third, just because random "couple who are successful in RE" said to do ABC doesn't mean you have to deviate from your desired plan to do XYZ. There are thousands of ways to be successful in RE. My parents were successful in RE but they bought in CA 40 years ago when homes were $40,000 so it's a different ballgame today. The couple you speak of may have done the same, so anyone with experience 20+ years ago before the modern spike in prices is playing a different game than today, may be out of touch, or may be rich and again can afford to play a different ballgame. Buying a fourplex in SFBA is $$$$$$$$. Stick with your plan (be it CLE or whatever) if that's what you want to do. I also live in a HCOL part of CA and will likely never invest here aside from my primary residence. My money will simply go further in other areas, which is what you want to do.

@Chris Mason is a local bay area lender, great to work with, and can also provide some advice once you update some parameters.