All Forum Posts by: Lawrence Leung

@Sam Hashemi  I definitely agree with @Brian Garlington that you will be hard pressed to find a home in your price range.  You will need to expand your area to the southern and eastern parts of the city (ingleside, crocker amazon, bayview, etc.).  We recently helped a client purchase a beautiful home for $1.3M in the Sunset and many agents were shaking their head wondering how we managed to get in at such a low price.

Condos will eventually bounce back and picking something up with low prices is a great idea.

@Richard Zhang DM me if you're still looking for a contractor

@Ashley Hall, Don't dismiss too quickly the opportunities that are near and present. You will benefit from upside appreciation that the bay area has to offer.

@Amit M. I can't blame them for wanting to be profitable especially in light of the approaching IPO, but they used a lot of venture capital to attract realtors and buy out other brokerages. And while they do offer a suite of services for their licensees, they left a big wake behind and are cutting back on a lot of things now. I think competition and variation is good for the consumer and they were on their way to monopolizing the market.

@Amit M.  HAHA that's an oldie. I miss the old brokerages. I'm not such a big fan of the consolidation that Compass caused.

@Nick Robinson I respectfully disagree with you. From an investment POV you make money in 4 key profit centers. I like CF as much as the next investor, but the real bang for your buck in SF is the appreciation (and hidden equity). I know you don't think the focus should be, but it really is an argument between cash flow or appreciation because your other two profit centers for amortization and depreciation are the same. So I agree with whole heartedly with Amit.

You can't ignore the math when add things up. We all know that the Cap rate in SF is abysmal at 2-3% and a good Cap rate in the areas you were eluding to earlier can be anywhere from 10-15%, but when you factor in the appreciation over 20 years CF can't catch up or compete with Appreciation.

Median home price in SF in 2000 was $500k, Median home price today it is $1.625M and increase of 225%
Median home price in the South/Midwest in 2000 was $160k today it is $290k an increase of 81%

@Abhishek Banerjee Either or, although the back cottages or separate structure on a lot is less appealing as you have to deal with egress and easements. But that is the hidden equity and xfactor from an investment strategy on the appreciation side.

@Sid Naik I'm not saying that it wouldn't translate in the traditional definition of how you calculate valuation based on NOI and cap rate, BUT at the end of the day it is up to the seller what they want to sell a building for and many owners are still living in pre-pandemic valuations hence why there isn't a whole lot of movement when compared to SFH.

@Amit M. The good thing is at that even far and few between, we sometimes get small wins. A Zacks was able to successfully beat back some of the RB buyout regulations the BOS tried to impose. Every little bit helps!

@Lois S. Another recent company I came across with an appealing business strategy for self managers is Hemlane.

@Abhishek Banerjee San Francisco has a limited amount of housing stock. Therefore a duplex, if viable, will be worth more if you can subdivide and create two parcels.

@Nick Robinson San Francisco is not for the faint of heart. If investing was easy than I think we would all be retired living in the tropics sipping Mai Tais. Everything you said about San Francisco is true and that is the exact reason why an investor cannot apply the same strategy that you would in other less challenging vanilla locations. But to say there are better places and ways just means you haven't identified the right strategy for San Francisco. So instead of discouraging, I would rather applaud advise and encourage anyone that wants to invest in San Francisco because the opportunities are there and the sky is the limit.

@Sid Naik, I agree with @Amit M. and @Johnson H. residential commercial and even some residential multi-family non commercial have not seen a decrease of 30%. What I have seen is multifamily not moving because of the decreased NOI and sellers are not willing to adjust their expectations on this temporary "normal."

It could be that you are referring to rent rolls, but even then I have not seen that decrease within an entire building and this is based on the few hundred units in the city that I manage. There are definitely property types and classes that are seeing 30% corrections in the rent but that's mostly in SoMa, Downtown and Civic Center studio and 1BRs.

@Amit, I wouldn't want or wish for vacancy control, but it does surprise me that in a progressive of a city like San Francisco that it hasn't already happened.  That said, the new inventory legislation is just one step closer to that reality.