All Forum Posts by: Manch Hon

Congrats Arlen! I remember you talking about rehabbing. Is that the 4-plex in MV? Do you mind sharing the before-vs-after rent? I guess 4-plex is still classified as residential instead of commercial. It might have benefited greatly by the rising value of houses around it. 

Do we see more inventory compared to 2014? I am betting on more inventory coming online in 2015 compared to 14. Many people call me nuts. We will see. Mathematically it can't go down every year or else we will reach 0. So it has to go up at some point. 

I don't think price will go down in 15 though. Not sure about 16. Inventory number will give us ample warning months in advance. So watch it like a hawk.

This is the Calculated Risk article I alluded to. Bill has been beating that drum consistently in the last 12 mo or so:

http://www.calculatedriskblog.com/2014/09/update-p...

Some excerpts:

Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the "baby boomer" generation, the movement of younger cohorts into the prime working age is another key story in coming years.

The prime working age population peaked in 2007, and appears to have bottomed at the end of 2012. The good news is the prime working age group has started to grow again, and should be growing solidly by 2020 - and this should boost economic activity in the years ahead.

To look at demographics one needs to look at the full picture. We may have a lot of baby boomers retiring, but on the other hand we have tons of people coming into prime working age and forming families and buying houses. Also, I suspect baby boomers are increasingly staying put and not moving anywhere, esp in the Bay Area and other warm parts of the country. Anyone has data on that?

You must meant the Harry Dent episode of Bruce Norris' podcast? I just finished listening to the 2nd half of the interview and I rolled my eyes so bad my eyes were sore afterwards. These "hard asset" folks just don't have full grasp of basic economics. To them our economy recovery is somehow not real, government should have done nothing to save the financial system, and we should all suffer Great Depression 2 because that's what God has intended. 

100% BS. 

Prime age working population in US will soon start rising again. Calculated Risk has been beating that drum for a while now. If you want to talk about demographics let's start from there. These folks will get married, form families, and what do they need? You are right. They need a house to call their own.

You will also notice Bruce didn't really agree with Harry's doom and gloom speech. At the end Bruce kept stressing you should draw your own conclusion. It doesn't help that Harry kept saying he was right and how a genius he has always been. Except all the times he was wrong I guess.

Regarding Sac, 2014 has been more or less flat price-wise. Calculated Risk has been documenting it very well. The surge in inventory looks to be mostly over now in previously distressed markets like Sac, Phoenix and LV. And with that I expect price to slowly accelerate in 2015. 

Not sure if it's just me, but I see properties around my Roseville rentals starting to close faster now. There seem to be more eager buyers all of a sudden. Do other folks see the same thing?

Haha. That's right. Suppliers to Tesla are setting up shops in and around Fremont, and these suppliers pull in their own suppliers... An ecosystem of advanced electric car manufacturing is taking shape in Fremont. 

My townhouse in West Oakland exploded in value this year. More than 30% in one year. That can't continue obviously. My tenant commute to SF for work. So the overflow play is definitely there. 

SJ's rent control is almost non-existent. Is it still 8% cap a year increase? And only for buildings older than 1978 or so? @Account Closed can fill in the exact details. I wouldn't worry about rent control. The most worrying part of rent control is not the numerical increase in rent, but that you can't evict tenants. I don't think SJ has that bad part of rent control... 

I can't bring myself to landlord in SF. I used to say "friends don't friends landlord in SF". But folks who don't mind fighting legal and regulatory issues are killing it there, like @Amit M.

I don't think Prop G will have a big impact on anything at all. Unless I am mistaken, flipping multi-fam is not really a thing. I can see it in maybe 2-plex, but 3 and up gets very difficult with protected tenants and all. Getting one set of tenants move out is difficult enough. Getting 3 sets out? Oh man.

Just make a bid on it. You never know. 

Prop G is really interesting. I suspect it's very good for longterm buy and hold landlords. It  means flippers would be out of the bids, and property on market would tend to be crappier and thus lower priced.  

Lifted from Socketsite:

The tax would be based on the resale price of the property with the graduated tax rate determined by the length of the hold. The proposed tax rates for buildings sold within five years of being purchased:

• Sale within one year: 24 percent
• Two years: 22 percent
• Three years: 20 percent
• Four years: 18 percent
• Five years: 14 percent

The tax would not apply to “single-family homes, condos, owner-occupied tenancies in common, properties not being sold at a profit, new construction, properties being turned into affordable housing, and buildings with more than 30 units.”