All Forum Posts by: Laura M.

Hi Carole -

Congratulations on your upcoming arrival :) !

I would not do anything at the immediate moment if I were you. I would sit tight and focus on baby stuff. The reason I say this is, as a mother myself, it will turn your life upside down for a few months. Don't put too much on yourself at the same time. Maybe you are a real go-getter but it would have done me in, personally speaking.

However, I am also a newbie investor, over in Oakland, and so I don't know much, although I do own property. My feeling is that now is a GREAT time to focus on location - where do you want to invest in? What locations are you comfortable putting your hard earned cash into? Where are locations people will want to live in and why? What kinds of properties are they looking for?  My brother flips in Pac Heights in SF and the people who buys his properties are in tech. He has narrowed in on his target market and knows where they are looking and what they are looking for. Then he just provides them the product, and he is doing quite nicely.

Then I would focus on finding deals and finding a realtor who works with investors who knows those areas. A deal will happen along - I think they exist in every market - and you will be ready and know what you are looking for.

I hope you keep us posted on your journey!

All the best,

Laura

Hi Michael -

Welcome to BP - as you can see from my stats and profile, I am new myself (still need to do my intro...).

I read all your posts (which were excellent, btw), and I come from a sort of similar story as yourself, to some degree. My brother does high end flipping, mostly in Pac Heights, in SF, and he has partners, a team, etc. He loves what he does, creating value, etc. but what he does has A LOT of headaches involved, and with two kids myself, I have enough headaches as it is!

So I am looking for a more passive, long term, have something to fund retirement, create wealth, leave to the kids, etc. type of investing, as well. I also want to create value and add to people's lives as well. I appreciate what you have to say on that topic.

I think Houston or Bay Area has lots of opportunity, you just need to know where to find them. Here is what I have learned from my brother:

1. Choose a location, and get to know it really really well. Build relationships with agents who want to bring you deals.  Finding deals is the hardest part of the business (again, he does flipping, so it's a bit different).

2. Have a good lawyer on hand (indispensable). 

3. Start a fund with other investors/flippers. The best way to make money and have multiple deals going on at once without having to be the lead.

I plan to start doing the same in the Oakland area very soon. I'm hoping to connect/partner with other Oakland investors to get a group going on finding and developing properties. I will post an intro on BP soon to get networking, but in the meantime, please keep us posted on your progress. I am learning a lot from your thinking process, and I plan to do the same when I get started, later this year.

Best,

Laura

Thanks, J Martin, for sharing your story - it's very inspiring and helpful to know what others have been able to achieve.You have a lot to be excited about.  I look forward to meeting you at an upcoming Meetup in the Bay Area!

Hi Juan -

I like your breakdown of ways to capitalize on up and coming areas. I think one would do best by finding value added opportunities, such as buying homes with room to expand and fix up. I am interested in finding some of these still undervalued properties in Oakland to invest in, although I am waiting for the market to stabilize and the frenzy to die down. I do think over time Oakland will experience even more growth in property values but it could be a while. Not sure if our current mayor will provide enough leadership on that front. Also, there could be some bumps along the way where the faint of heart take flight.

Your background certainly helps you in that it gives you the knowledge and security to go into areas that others might not

Thank you for starting this thread - I have really enjoyed the discussion. It's so easy to look backwards but much more fun to look forwards for opportunities.

Steve,

What you say is exactly accurate. Crime is really it. Once the city gets crime under control, prices in these areas will appreciate quickly above how much they have already appreciated. Then school quality will follow. And no, it's not rocket science. Limited housing, growing population, lots of amenities, etc.  However, will that take 5 years or 20? That's the question, and there's really no way of knowing. To take Oakland as an example, I've lived here since 1990 and while it has changed a great deal, people move here only because they are priced out of Berkeley, Alameda, and San Francisco. But, Oakland has so much more potential than Berkeley and Alameda, and even San Francisco, which at this point has played it's hand. Crime is keeping people at bay in these undervalued areas.

So, I guess the gamble is really a long term one.  Buy the properties and be prepared to sit through a couple of market cycles if necessary, and ignore cash flow as the game is entirely one of appreciation.

Now the next question is: when to buy? It's a nightmare out there right now and everyone and his uncle has a prediction for the next 'bubble' or the crash when the Fed raises interest rates, but that could be a number of years away, meanwhile the investor has sat on the sidelines (so many people became quickly priced out of the market because of this 'wait and see, cross fingers' approach) thereby losing appreciation potential, or buy the property and know that it could depreciate quickly when the market turns.

It really does feel a little like getting into the stock market right now.

Thanks, Juan for your detailed post. I'm a new member of BP, been lurking for a while now while I educate myself on investing, and this is my first post ever!

I currently live in Oakland and have lived here since 1998.  I think the interesting part of this discussion for me is to take our 20/20 rearview vision and apply it forward. Back when I was buying my home (worth more than triple now than when i bought it, dumb luck, but not cash flowing because i live in it!), it was really unclear what was going on in Oakland. In fact, many people, and several people I know, were leaving Oakland because of the crime, poor schools, etc.  Portland was the main destination for a lot of those folks.  Unfortunately, those same factors that drove people away exist today.  Back in the late 1990s, a lot of us were aware of West Oakland and scratching our heads as to why it hadn't gentrified for all the reasons you mentioned. I wasn't ready to invest back then (argh), but it really seemed like things could swing either way. 

How you laid out your case made it look really obvious, but it was anything but! Obviously, you had to be a risk-taker, crystal-ball gazer, in it for the long haul, diversify your holdings, kind of investor.  

For someone starting out, it could have been a nightmare (bad tenants, etc.).

So my question to anyone following this post, is, what does that same situation look like today, and how do we find those undervalued areas?  

I would agree that talking with real estate agents to learn about changing buyer demographics is key, but how many data points do you gather before you feel confident that 'this is a trend' without it becoming 'it's already been discovered and no longer undervalued'?

Where are those pockets today? Where are the artists moving to now (besides out of the state, after all, those guys mostly rent and easily pick up and move, i.e. Portland received lots of Bay Area artists)?

Thanks!