All Forum Posts by: Sri L.

I did close on a conversion deal late 2020. After months in escrow I was able to close with approved permits for the conversion, so work started day 1 after close. Demolition has begun and we are planning to renovate 15 units every month. More details on my FB page (link in my profile) on financing etc. 

Congrats Susan! BP recommended your post to me, nice to see you got a lot done, and moved out of the bay area! Wishing you a great 2021! Is the note 50-50 split a contingency of her program? Are you flipping the note to another bank?

I live in San Jose in NorCal. Like many mentioned here its easy to say "California doesnt cash flow" and move on, but you just have to determine if you want to do more work make more money or do less work and make less money. If you are time and resource constrained then going out of state is a good bet. 

What I have realized over the years is - there are deals to be had in CA as well. CA is great at allowing you to multiply your capital quickly because cap rates are low, and sale volume is high. It requires creativity and a hyper focus on how you can increase the income on a property. A few strategies that work in high cost of living markets 

1) Layout changes - I have converted 1 bedrooms to 2bedrooms, studios to 1 bedrooms and simply by doing that I increase the rents significantly and now the property can be cash out refinanced. 

2) Adding ADU's, preferably attached ADU's (basements, garage etc)

3) Cash for keys + Renovations - washer dryer in units, and upgrade unit (combine this with other 2 strategies, above and you've doubled your equity)

I had a property that I sold in the DFW market. Looking to buy a multifamily there soon.  

I am executing this model as we speak. In contract on two hotels with the goal to convert to multifamily. Happy to talk more. 

I am in contract on a hotel property in ABQ, in the Huning Castle area. Looking for lenders who will lend on purchase and renovation. The property is currently operated as a hotel however it is already zoned for multifamily. Have the track record, boots on the ground, funds etc. 

Looking for 2 things:

1) Lender suggestions from those who have done it before/operate in this market. 

2) If you have done a hotel to multi conversion before I would love to connect to talk more. I plan to do more of these deals.

@John Fortes - Happy to chime in! 
Hi @Bruce Hyunh - welcome to the world of RE investing. Learning and narrowing your buying criteria is going to be your next steps. I built my portfolio around apartment investing in the bay so be open to the naysayers who say Bay Area doesn’t work, plenty of folks investing here.  I run a Bay Area specific apartment investing group - link in my profile. Feel free to engage and find like minded investors there. 

Chiming in - I do expect a correction maybe 5-15%, and if you have the cash you should buy, if not just ride it out. It's definitely not going to be as severe as the last one. The problem with crashes is most people dont know what to buy (either because they try to optimize and buy the "best deal"/time the bottom of the market) or they are just dont know what the strategy is. I recommend niche-ing in watching the market closely for a few months to a year, and then acting on all the data you've gathered. I always go back to the analogy that if a crash is 5-10%, and a growth market grows at 8-10% then really all you are gaining is a year worth of equity, so always be doing deals as long as the deal economics makes sense. 

I dont think the WFH trend will last very long - like most things we will reach some type of equilibrium and I do think the equilibrium involves an office space, flexibility to move tech jobs, etc. To those mid-career with no plans to move jobs, might move away from the area, but honestly they tend to be the ones who have already have planted roots here, and likely more fearful of losing their jobs. 

I started investing out of state in multifamily and then moved back to CA and have invested here ever since. There are ways to make CA cashflow, but it is more work. Definitely a meet up is a good place to start. I also have a FB group (link in my profile) where you can meet and ask questions to fellow investors who are looking to execute a similar strategy, all based in the Bay Area. 

I admit there is rent softening everywhere in the Bay Area. Most of these big drops tend to be class A buildings and new construction. If you’re a smart apartment investor then you buy class C properties and fix them up - your rents are always middle of the market. All of my rents have come in so far, had two leave when leases ran out I re-leased those units at the same rates (yes I did give a concession of 1 month free which i admittedly did even before the pandemic)

I understand the move to Sacramento and other areas but what people forget in these articles is a lot of people want/like job mobility. If you want to switch from one tech company to the other you likely will still have an advantage staying in the Bay Area vs leaving.