All Forum Posts by: Keong Kam

Here is my 2cents:

 - With rent growth it probably won't be negative in a few years.

 - If $300/mo negative is manageable for you, it's not a bad investment. People put more than $300/mo into 401K with stock market!!, I think you will come out ahead with less volatility in the long run compared to your 401K.

- Question is more of: do you have enough reserves to cover vacancies and some unexpected cap ex? Like 6-12mo of PITI? Having a reserve definitely puts more peace in your mind.

- With the combination of long term fixed leverage, I've not seen better risk-adjusted return elsewhere than the prime bay area real estate.

Hope it helps!

@Samuel Gardener I was in similar situation as you about 2 years ago. I had a 1br condo on Winchester Blvd and was contemplating the same.  I did the following:

1. Refi to minimize loan constant (i.e. 60% LTV Interest only from local bank), this made it cash flow even from day 1.

2. Take a vacancy hit (I took ~1mo to find tenant), and find the best quality tenant and current market rent.

3. Open a HELOC to access remaining equity (80% LTV), and re-invest on other assets (out of state properties, private lending, etc)

In the end, you have an asset like other people mentioned above, that will continue to appreciate in the long run, and you have access to the equity to reinvest and make more profit. 

In the end, I have ~20% equity locked in the property. But consider the rate of appreciation over time. Let's say being super conservative and value goes up 4% every year on average, And you have 1:5 leverage, cannot beat this return. And you can adjust financing like I did to make it cash flow.

My plan is I am never ever letting go this golden goose in my life!

Has anyone experienced losses or failures (i.e. significantly less than expected return) through participating (GP or LP) in professional MF syndications? If so, can you share? What went wrong? And what was the outcome? 

I strongly believe that carefully vetted commercial MF syndication is a good investment vehicle due to many many reasons (professionally managed, more passive, economy of scale due to large units, spread of risk due to multiple partners, and all the goods of Commercial MF like forced appreciation through value add, not only to mention all the tax benefits)... But I wonder if anyone has been in 'bad' syndication deals before.

interested and following. How much extra rent are you getting on the ADU?

@Sam Shueh interested. Sent you an email!

Thanks for the detailed thoughts as you always do @Sam Shueh !

Sounds pretty pessimistic about Burbank in general. Do you not see any future upside in this area with the whole Santana row/ Winchester area booming on the west, google campus in downtown to the east and Sunol area getting better? 

I am looking at houses in more like Buena Vista which is slight east of Burbank. Seems like varies block by block and generally better closer to parkmoor and gets worse close to StCarlos side. I am looking at 3/2 or 2/2 houses ~ 1000-1200sqft with >5k lot. There are many sold comps at 1-1.2MM in like 5block radius. Isn’t this a sign of revitalization? Low income population is getting pushed out of the area? 

Certainly understand your comment about illega additions and structures. But isn’t adding a nice new 6-800sqft granny unit on 6-7000lot perfectly allowed and normal? That’s what I am looking to do. 

I am looking to purchase as primary. I know school sucks. I have 3-4 years before that plays a role. I am looking to see some improvements in school or just go private school.

I am looking at 3-5 years down the line and thought Burbank Buena Vista area definitely has revitalization potential. 

Your expert thoughts really appreciated. 

@Albert Ng what does it mean unincorporated? Does it mean it’s not San Jose jurisdiction? So San Jose city ordinance does not apply? Then It would follow Santa Clara county ordinance right? What is the ramification on that?

@Nicholas Leone yes I called some people and I got $200-250/sqft in general. Thanks!

@Brian Spohr Thanks for comments. I agree the upside is not immediate or short term, but Burbank has some upside in the next few years future based on my observation of are development. I am looking for 5-7K lot home, I see several in the market already.

Hello BP!

Got a question for San Jose / Bay area people. What is your general thoughts on Burbank San Jose area?

It's seems to me like an old run-down area about to gentrify. Close to Apple, close to new Google campus, price is relatively cheaper than prime area.

School's not great, but with area improving, will it improve together? I did see Burbank/Del Monte redevelopment plan in San Jose city website, but seems rather vague, i.e develop parks, improve circuilation, beautify neighborhood, etc. Couldn't find anything specific.

Does anyone know of what's going on in this area and any helpful information? Looking to buy a primary home in the area on the prospect of area developing and also utilizing large lot for expansion/ADUs in the future.