All Forum Posts by: Hayden H.

Piedmont is basically all single family homes over 2M so in terms of investing, it would be for appreciation only. The school district is very good!

Hi David, i'm also looking to do this in Oakland so I'm following. I was told to get an architect and structural engineer and they will let you know what to fix as the process will require permits and inspections so walls will have to be open. Not too many of the architects I spoke too had a lot of experience doing this so it does seem pretty rare. Most either have experience in converting garages or starting from ground up whereas my unit is already in the main home. I'm trying to do this through an ADU as well. I think it will cost 10s of thousands so its only worth it if the value it brings is substantially higher. I haven't even entered the unit yet and will do so early July and will let you know how it goes. Good luck!

@Keri Carpenter is spot on. It's not a good area and I doubt gentrification is on the way but if you want to get in the game sometimes you have to make sacrifices. Whether it's worth it only you can decide. You only gotta live there 1 year so even if its bad as long as you don't get hurt you can weather it and move out with a good interest rate and fixed rate loan. Not sure if short-term rentals are going to work for the same reason that you have doubts. 

Thanks Steve, I know a few wholesalers but haven't bought anything from them, PM me. I think that type of spread buying for 900k-1M and 1.3-1.4M after rehab is very rare nowadays on the MLS, you may need to readjust expectations or do some driving for dollars and contact owners directly.

Hi Steve, Congrats on the cash flowing properties in Phx! Do you have enough equity in your duplex that you can pull out a chunk of cash through a cash out refi so that you can minimize the hard money? I think the HML will want to have a licensed GC do the work and you will want a lender lined up that can cash out refi for you. You can ask Sean Pan from Conventus on the hard money part and see if they are okay with your plan. I think many of them don't want to fund a primary residence but ymmv. Also, just be aware that HML will prob cost 2 points and 10% with extension fees if your rehab goes long. It may be tough to get hard money if you don't have a track record of fix and flips but if the deal is good enough they may do it. Also, depending on how complex the rehab is, it could drag out 1 yr + as permitting can take a while.

I think its a good idea in principle but there are a lot of variables, each being important enough that you need to properly plan/vet ahead of time. 

Congratulations Vu! I'm not sure what's up with Jack's estimate of 250K to add a bed/bath within the envelope of the home lol. He sounds like an old spiteful man who lost a lot of money and now hates the world. I assume you don't have to rearrange the 4 other bedrooms and 1.5 baths to get this done. And if you don't do this with permits, it might not cost anything over 30-50K max. I think what you are doing is 'getting into the game' and starting the beginning of the snow ball effect which will pay dividends before you know it. Paying $1,255/month to own a property that should be worth over 700k when you are done remodeling is a smart move in the Bay Area. That area is def up and coming, and that purchase price point is awesome as well. Lastly, you aren't bragging, you are showing others the bay area real estate is doable and that is much appreciated! 

Hi Raju, 

Are you negotiating for 4 units and below or more than 4 units? If negotiating for more than 4 units, and cash flow is only around breakeven, you are almost certainly going to have to put down more down payment than 25% as banks usually want a debt service coverage ratio of 1.2 or more. I'm actually going through this myself with an 8plex for my parents next to Lake Merritt. Commercial lending interest rates are few percent higher too - meaning you will probably get something closer to 4-5% than 3%. And the loans are not 30yr fixed, they might be fixed for 5 years then reset and length may only be 15 or 20 years before a balloon payment is due. That's why you may see 4plexes that could sell at a higher price than a 5plex, since financing is cheaper, down payment is lower, financing options are more and whole process is a lot less complicated for less than 5 units.

I think a good strategy would be to try and purchase properties that are severely under market rent for a lower price and try to negotiate with tenants to leave. Once they leave, it automatically increases the value of the property by six figures which is a lot better than trying to cash flow a few hundred bucks a month in other parts of USA. Obviously in order to do this, you will have to be able to sustain the property with current rents in place. Also, I like looking for properties with under market rent but with tenants who are young enough that they will most likely move in a few years due to a job change, life event, or they want purchase their own house.

I do agree that rents should eventually bump back up but many companies (Square, FB, Twitter etc) are doing fully remote so I don't know if 1-2 yr time frame is reasonable.

@Nick James thats awesome to hear. You ever start on your ADU?

@Brian Garlington, a triplex in east oakland that is being bought for 975k rents for 9.75K a month? I find it a bit hard to believe.

Hi Teddy, I totally get where you are coming from. If you can live for free that would be awesome and totally worth the drawbacks. West Oakland is definitely working class. There is crime but mostly vandalism, auto theft, etc. It doesn't get dangerous usually but not a place you want to be outside after 10pm or just wandering around after dark. The tenant base can be difficult to work with since I'd bet most are working class but shouldn't be something you can't handle. I think  once covid is over, multifamily prices should recover assuming the bart station is being used. So it might be a good time to get in if its a good price.