All Forum Posts by: Parker Ludlow Imrie

I've done some creative financing, sorta house-hacking, and reno/refi with primary residences, but still trying to find a path to my first true investment property.  Affordability is a big challenge in the bay area but I'd really like to start local so I can be hands-on while I'm learning.  I found a (suspiciously) super-affordable plot of land on biggerpockets.foreclosure.com in San Mateo County.  I spent an hour or so researching and although it's clear that there are lots of hoops to jump through to develop there, there were no clear show-stoppers.  Can someone who's familiar with the area point out any big gotchas?

I'm tempted to pounce on it; if nothing else I can sell, right?  It's cheap enough I could afford to lose it all, so it seems like a worthwhile gamble.

Originally posted by @Jordan Geiman:

I'm in Alameda also. Check out "Alameda Renters Coalition" facebook group. It has info about all the rent control in Alameda. I know there are protections on % rent increases each year and also if the tenant had been living in the home for more than X years if you want to evict them you need to pay them $Y that changes depending how long they have been there. And that can be a pretty significant cost.

Thanks, I will check that out. So seems like I could treat that eviction cost like CapEx, right?

Originally posted by @Naomi S.:

Hey, I own a couple multi-family homes in Alameda and just recently closed on the second one. Almost everything built before 1995 is subject to rent control but in some cases, it depends on how you set up your rentals.  Here's a good resource of FAQ's that breaks down rent control AlamedaRentcontrol. I encourage you to go to the Housing Authority workshops while you're in town to learn more about the rules, because they get updated frequently enough and will get you up to speed. Since the island is full of old victorians, it's hard to get away from it. If you have specific questions, you can reach out. 

Thanks, that's really helpful!

I have done a quick read through that site, so good to know it's the right place and I'll be digging deeper soon.  And I hadn't noticed the workshops, which look like a fantastic opportunity to learn.  I will definitely reach out to you too for some local wisdom too.

Originally posted by @Brian Garlington:

You'll find more MF Opportunities right next door to you in Oakland than the rest of Alameda County and Contra Costa County combined. Are you going to 1031 Exchange when you sell your cureent SFH?

Oakland's not out of the question, but we do have reasons for preferring Alameda.

I've heard of 1031 exchanges but never looked into it.  What are the advantages and disadvantages?

Originally posted by @Bruce Woodruff:

If you must stay in the SF area, I would at least look for a city or jurisdiction that does not have Rent Control. If you willingly go ahead with a RC property, you are taking on the Govt as a partner in your business. Think about it - they didn't provide any capital, do any improvements or take any risk, yet they want to tell you, errr force you to run the business a certain way,  a way that is financially harmful to you. This makes zero sense....

Agreed, it's a high cost of doing business.  If this were pure investment, I wouldn't be looking in Alameda, but this is also where my wife and I will live and commute to our jobs from, so the considerations shift a bit.

I've read that San Leandro, right next door, has no RC, so I am going to look around there too.  Does anyone know of a resource that summarizes Bay Area rental regs by jurisdiction?  That would be handy to zero in on better possibilities.

Originally posted by @Darius Ogloza:

Some jurisdictions within the Bay Area have rent control statutes/ordinances but others do not.  In order to get a handle on rent control law, you need to get more local and more granular.  Here in Marin there are few places with any kind of rent control at all.   

Thanks for the suggestion.

I definitely plan to dedicate some time to researching rent control in Alameda and neighboring jurisdictions. I learned a bit about differences in local rent control when we briefly did some house-hacking with our SFH in a different city (shared-space, low-demand area, wasn't great).

At this point I'm mainly wondering if anyone has over-arching insight into Bay Area landlording pitfalls, including rent control and other relevant regulations (permitting/zoning etc.), or suggestions about Alameda specifically.

Originally posted by @Ronald Allen Barney:

I'm not in the Bay Area but it wouldn't make sense to me that they would target only MFH for rent control and not include SFH. I think that would be a wash.

The latest round of eviction moratorium has been a political weapon targeting only those areas that weren't as obedient on the Covid Commandments down from On High, which I think in the Bay Area every time Fauci reads tea leaves that instantly becomes public policy.  That should mean at least not having to be blocked from evicting bad tenants.

Specifically with house hacking the two biggest challenges tend to be finding one (as they are highly in demand these days as a lifestyle fad), and the second challenge being funding one when you find it.  It sounds like you have a cash position that makes the second challenge not a problem, so if you do manage to find one I'd say vet it with investor math and then if it passes (no as a measure of how much it reduces the mortgage but the cash on cash return if you were to rent out the whole building, pretending you are just another renter in the math), I'd say jump on it.

Thanks for the insight!

To clarify, our interest in MFH over SFH has nothing to do with rent control, just the increased revenue potential and not having to share living space. The sale of our current SFH is because the rental math for it sucks, while the appreciation has been great.

I don't expect funding to be a show-stopper, though the competition here can be ridiculous, and we're still waiting to see exactly what pre-approval we get and what we walk away with from the sale. As for finding--there are actually a lot of MFH and convertible SFH on the market in Alameda right now, though the numbers I've run so far are never great. Hoping to find something a little better with the help of an agent and/or off-market searching. I like your notion of analyzing with ourselves as renters too; that makes everything more apples-to-apples.

Any insight on STR versus long-term? My understanding is that it's greater cash-flow potential, in exchange for higher management costs (which a house-hack situation would somewhat mitigate) and more volatility.

Thanks again.

My wife and I live and work in the San Francisco Bay Area, have roots here, and plan to stay. (Great place for a rookie to cut his REI teeth, right?) We are about to sell our SFH (not a profitable rental), which should give us a decent chunk of cash to start with. In the meantime we're renting in Alameda--we intend this to be temporary, though the area is pretty ideal for us long-term. We've been looking at MFH house-hack options, which seems the most straightforward, but haven't ruled out other options. I don't expect to break even in this market--I'm okay with dramatically reducing net cost of living from our SFH PITI, allowing us to save more for the next investment, but I am also concerned about rent control and other local gotchas.

What should I know about Bay Area rent control? What other gotchas should I educate myself on? Are there other options worth looking into as a newbie? (Self-storage seems attractive too, or simply remote investing, but don't know if those are worth continuing to pay rent ourselves). Is STR house-hack a better bet for cash-flow?

Trying to avoid analysis paralysis but there are so many options and variables; I'm looking for some guidance.  Thanks in advance for any words of wisdom!

You know your own situation best, but that certainly sounds like asking for trouble--emotional, financial, logistical.  It's not impossible to mix personal and business interests--I've done it with my family--but combining an "ex-spouse" relationship with a landlord/tenant relationship invites any small problem with your tenant to drag in all the personal baggage from your marriage, and any unresolved conflict from your marriage to be used as an excuse for causing trouble with your property.

You clearly want to be decent and help her out, which is awesome, but a better way might be to just gift her part of a downpayment on her own place, or a certain lump sum to subsidize her rent elsewhere.  That makes it a simple, one-time thing that still allows for a clean break.  Then go invest for yourself.

I’m starting to analyze properties, and particularly interested in small multi-family properties.  In trying to estimate rents, I’m looking at both the listing sites and BP’s property insights tool. I haven’t seen anywhere that specifies whether those numbers are per-unit rent or total rent for all units in the property.  What’s the convention?