All Forum Posts by: Jay Y.

@Dani B. Welcome from another Bay Area investor! I've invested in state and out of state. There are pros/cons to each approach. I guess the biggest hurdle with local investing is the large amount of capital needed to get started (relative to other markets, such as Indy).

But there are clever ways around that, such as the technique @J. Martin used to get started...

Feel free to connect if you want to discuss more.

@Max Balesteri Welcome from a fellow Nor Cal investor!

I've done both in state and out of state investing. The out of state cash flow is nice when it works, but it is by far more hassle than investing locally. For the first deal, I would absolutely want to make sure I was buying right, as a bad initial experience is what sends many investors to the exits for good, unfortunately. And that's going to take a ton more due diligence and luck out of state...

If your idea is to use drip cash flow for reinvestment, that's probably going to take a lot of time to save up between deals as well...

Investing in the Bay Area is not easy by any means, but all it would take is one sharp spike in the market, and you'll be able to cash out a ton more money for any future deals. Then you can buy as many out of state properties as you want (they won't appreciate anywhere near as much or as rapidly as the Bay)... Also, the downside protection you'll get locally is unsurpassed. Almost anything on the market here is flying off the shelves... Investors (foreign and domestic), and homeowners all want property here. Too much demand, not enough supply...

Good luck!

Townhouses are my bread and butter, but I think a lot of it has to do with location. For instance, I could pick up a SFH a little further away from center for the same price as a townhouse in a prime location. With all else equal, I'll take the location (and townhouse) every single time over the SFH that's further away because the rents will be much higher, and vacancies lower, or close to nil.

If the townhouse is attractive enough, again probably due to location, it can fetch just as much demand upon resell as a SFH. Yes, I've been involved in bidding wars over a townhouse... As an extreme example, a townhouse or condo in Cupertino can be worth much more than a SFH in South San Jose...

Right now! In fact, I was at an open house earlier today with my agent. It's always tough in the Bay Area, but when it does slow down, it's usually in the winter months. Prices, investors, and bidding wars are all out in full force come spring time...

Congrats @George P. 6 properties in one year is no small feat!

You won't find 1% in the Bay Area right off the bat, but you don't need to in order to succeed here.

Rent appreciation + price appreciation is what will win it in the long run here.

@Harshad Ranade Welcome to BP! I'm also in the Bay Area and invest both locally and out of state. I'd be happy to share my own experiences if you would like to learn more.

And yes, the San Jose meet ups @Johnson H. hosts every month are a wonderful way to help you get connected with other local investors. I would highly recommend it.

Happy hunting!

@Account Closed I'm also in Santa Clara and a huge fan of the area. As I shared in the last BP meet up, I recently closed on a property here... The previous owner was also an investor and renting the place out for $2300/month.

The place was inherited in great condition and needed minimal work. It's a 3/2 townhouse and we just secured a tenant for $3100/month without much effort... This is why I'm back investing in the Bay Area!! Yes, prices have climbed up a lot from a few years ago, but so have the rents which make local investing so much more attractive. Cash flow may be minimal upfront, but in a few years, it will trump what you can probably get out of state. Not to mention you're dealing with a much higher quality tenant pool here with everyone making $100k+ salaries. And let's not forget appreciation, which is how you really make money in Bay Area REI...

@J. Martin 

Yes, it's insane how well compensated these early 20 something software engineers are getting paid. For our recently acquired townhouse purchase, we got an application and the guy attached his job offer... Even without factoring stock/bonuses, his base salary was about double what my partners and I make at our day jobs... He's only 27!

"That's not right!", my buddy uttered out in disbelief. Had it not been for the laughter, we would have all wanted to cry... but if you can't beat em...

@Johnson H. Thanks again for organizing this!

Sorry I wasn't able to make it to the last meet up, I was out of the country! Will definitely attend this one. 

Got a few local deals in the works as well to share...

I'm with @J. Martin , the current location works well for our group size, parking, etc. I would vote to keep it since the food is really secondary to why we're all there...