All Forum Posts by: Account Closed

This is so great. As an inspiring investor living in Oakland, such a positive story is encouraging to hear. I was the head Chef at a Bay Area Top 100 restaurant until I quit last May when I realized that after living in the Bay for 12 years, most of it inside a restaurant, I wasn't taking full advantage of WHY we live out here. I'm beginning to put in a lot of hard work to get myself in your position, @Account Closed. Congrats to you. 

As of now, I have a fair amount of capital to start with and am looking for deals in the greater Bay Area, mostly SFR's in the hope of scaling up into MFR's in a few years. Also interested in partnering on something. I'd really like to come out to some meet ups but I don't see any on the Networking Events page. Are there any coming up?

Yeah I'd really like to go to this but as @Chris Mason pointed out....it can't possibly be at 7:58AM New Years Day...right?

Anyone know of a good, investor friendly agent in Vallejo California??

Thanks!

yeah @Arlen Chou that's an interesting article. I didn't take it as a knock at all. It's an interesting and important conversation. I think in SF and SJ that is and will happen a little. To my knowledge that had happened primarily in the very large buildings downtown not in SFR and MFR rentals. Here in the East Bay the rental scene is nuts, hard to find a nice rental in a good location. The Bay Area as you know consists of so many different cities and towns it's impossible to make generalizations either way. I just know that since I've rented here, in Oakland, I've never seen rents go down in quality properties. Not even in the "recession" And every month in Oakland I see flocks of new people moving in from SF.

@Arlen Chou Yes I'm sure there will be market "corrections" in rent but I've rented in Oakland and San Francisco for 15 years and moved about every 3 years. Rents have always been more every time. I don't see why that would change. Sure, maybe in Fremont or Dublin, but overall no way. 

@Par Attaran check out this thread:

 https://www.biggerpockets.com/forums/48/topics/360...

I asked a similar question and the conversation it sparked was very helpful. Also listen to BP Podcast 131 with Serge Shukhat. I was ready to go out of state but this changed my mind, convincingly. I'm a newbie in Oakland, CA but basically you have to assess your goals and your competitive advantage. If $2500/month is your only goal and you want it quickly then yeah cheap out of state could work in quantity. But if wealth building is what you want (it's what I want thats for sure) look into staying local. California is expensive but it's incredible, thats why we live here. Thats not going away, water issues or not. There are lots of great areas still with deals and areas that will certainly appreciate and rents will only go up. As @Scott Trench pointed out this is option B. If you can get in in a hot local market that you know well, do it. What do you want on your balance sheet in 10 years? A whole bunch of C quality duplexes or a few really nice B properties with great tenants?

@Matt R. Thats what I'm talking about it. When I tell people I live in Oakland, they tell me how dangerous it is. But those same people would've loved to buy here in 2010 when you could scoop up places for 300K that are now going for 800K. 

Great conversation guys and gals. I'd have to agree with @Account Closed about settling for a lower rent to value but with a much higher appreciation and forced appreciation potential. Especially in an area where you have a competitive advantage. I'll say it again because I don't hear enough about it: competitive advantage. As Serge Shukhat puts it, sure you can invest in C properties and get some cash flow. But that 70K duplex won't be worth much more in 30 years, especially when factoring in inflation. If you're in this to build serious wealth, you gotta go with quality and most importantly have a competitive advantage. @Sloane Rowan this is exactly my point. My advantage, living here is that much of California isn't being overvalued. There are tons of areas that are actually undervalued if you know where to look. SF Bay Area in particular is on the rise in secondary markets and they're still affordable, with value adds even. 3% growth on a 70K duplex is peanuts and you'd have to have a huge portfolio to make that a real wealth building strategy. 

@David Veeder Yeah I understand that cash flow is important and appreciation is speculation. I get it. I think though, as we have stated before, having a competitive advantage in a market is pretty crucial. Sure, high end areas like the Bay, LA, pretty much anywhere on the west coast, will have a lower rent to value ratio. But rents are also increasing here and always have been. They're never going down. And while someone from outside of the area may look at the appreciation potential as "imaginary", which is fine, the advantage of being in this area is knowing that it's not. Google, Facebook, etc.. aren't going anywhere. There will never be a shortage of people wanting to live in warm weather climates. Ideally you want a little of everything right? Cash flow, forced appreciation, natural appreciation, etc.. It's just a matter of what ratio of each and where? And what types of properties do you want on your balance sheet? What quality of tenant? If I lived in the midwest, I'd definitely invest there. I still might later on. 

If you haven't heard Serge talk about this on podcast 131, I'd check it out. 

Yeah, this has been a really useful discussion. @Kuba F. @Jim Cummings @Jana Cain @Kathleen Diaz

I think it's not so much about being hands on versus outsourcing work as much as it is about knowing your market and how you have a competitive advantage. Investing without a competitive advantage just doesn't make sense. California and Boston are expensive but in 5-10 years would you rather have a few nice properties with B tenants in or outside of Boston or SF on your balance sheet or like 10 duplexes worth 70K each in the midwest with C or D tenants? 

The little subtleties that you are aware of in your market? You don't have those anywhere else. No matter how much research you do. Check out the BP Podcast #131 with Serge Shukhat. He talks a lot about this. It's not that it can't be done out of state, I'm sure it can. It's just harder, different, and will probably take up way more of your time. And with REI, you want a return on your money but also your time. There are still some out of state investments I'd like to make in the future, but I think building a solid portfolio in your own area is important.