All Forum Posts by: Sanjeev Advani

@Account Closed - my main issue with your statements is that I haven't actually pulled my information out of thin air.  If you look at the Redfin market report for both of these markets over the past 5 years you can see where I pulled my numbers from.  And there really is no argument that Multifamily would be the way to go if you want to scale as an investor, but that doesn't mean that it is the end-all-be-all investment for everyone.  

IMO the biggest problem with "investors" today is that they NEED the highest returns and they NEED to get the best deal, when in reality most private investors don't actually need more than a few million to retire, which you can finance up front and pay off over 30 years, and that can achieved with a $0 cash flowing property over that period as well.  

Hi @Dhanasekaran Ranganathan

Glad to hear that you are planning to invest in Bakersfield.  I do believe that this market is going to be good over the mid term hold and longer, and there are many things going on in town that haven't been happening before.  For example, the boom in transportation business, growth in jobs, and development. 

Because we have such an in depth post below yours, I am going to attempt to add to the analysis below and hopefully that can be of help to you as well.

@Account Closed you are correct Bakersfield is hot, however, not as hot as Phoenix, which currently has a population 4x that of Bakersfield and was build around a lot of the same principles that Bakersfield is moving towards now. 

I would agree with your point that in San Francisco, you do have more rent, and the cost of paint really doesn't change that much, but at the same time, you also have to use higher end and more expensive finishes to achieve those higher end and more expensive rents which do end up costing a lot more, and this point is strictly taking into account property appreciation while leaving out the thought of cash flow. 

I agree with the long term rental argument, unless you know how to build a team or have the time and energy to go do it yourself out in where it is that you want to invest. 

I would love to see the math on your business model.  I can see that you might be correct, but just 'back of the napkin':

• $2M house near the Ocean - let's use Newport Beach - 5 year appreciation 27%
• $2M in SFR's - let's use Bakersfield - 5 year appreciation 44%
• Difference - 17% over 5 years - 3.4%/year greater in Bakersfield

• $2M house near the Ocean - Newport Beach - $0 cash flow long term rental
• $2M in SFR's - Bakersfield - 6%/year long term rental
• Difference 6%/year - 30% over 5 years greater in Bakersfield

Now there may be other markets this works in, but my point is statement doesn't really work.  IMO, in all markets there is strategy.

And this is true, if you want to use whole life or some 'wealthy' persons investment strategies then you will earn 4-5% on your money, and if you own a property which will get you the same return then you may as well go with the safer option.  But there are also benefits to people who own real estate that people who have whole life insurance may not get, and the same for stock portfolios, but I'm not well versed in those things, so I would be open to learning. 

@Dhanasekaran Ranganathan the point being, if you are looking to invest in Bakersfield or anywhere else, know your numbers, and make sure your strategy works for you.  If it doesn't then don't do it.  Feel free to PM me to chat further as well. 

Best of luck,

Sunny

@Shiyuan Zhang welcome to BP!  I think starting here is a great step.  Most of the people are very helpful and super knowledgeable!  

Regarding your question, if you put the downpayment in and you are able to find a. property that can break even at least for now, then the question is are you going to be able to get a decent return just using appreciation in the market.  For example, if you are able to find a property that breaks even in Long Beach, and you hold that property for 2-3 years, that property would have to increase at least 8% in those years just to cover your selling expenses.  So that then becomes approximately 2.5-3% growth that you need just to break even.

I would say that looking into areas such as Bakersfield and the surrounding communities might be a better option here.  The locale is still within driving distance of your current location, and you will not have to invest OOS and try building a team from a distance on your first deal.  

In Bakersfield, there are cash flowing properties that are still good deals, however, they aren't just floating around out there like they used to be.  And you want to work with someone who knows the area as well.  

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Best of luck!

@Reyes Velasco nice! Congrats!  Hows that property doing for you?

Feel free to reach out through PM if you would like as well!

@Reyes Velasco what type of property did you get? Congrats  on your first property!

Hi Vivian - 

It really depends on the type of investing you are trying to do as to whether Taft will work for you or not.  Taft is largely an oil town, and it doesn't seem to be changing any time soon.  The rental market has gotten hotter, as with other markets in the area, but I wouldn't say that you have seen stellar growth.  Regarding your property price, this would tend to leave you in the lower ranking areas of Bakersfield for a value add property, or potentially a much more finished property out in Taft, but the trade off would mainly be the size of population you have to pull from when renting the property.  

If you would like to chat further please feel free to PM me as well! 

Best of luck!

@Saul Dueñas you should check out @Gene Hacker group.  Its in Bakersfield in person now, but if they were to continue the Zoom version I would recommend this group for sure.  

Hi @Mukesh A.

Lots of moving parts here unfortunately due to the COVID laws coming into place. 

A few questions to start:

1) I am assuming your Tenant is making their partial payment as the 25% of rents that is due through June?

2) Have you been serving the proper notices to your Tenant during the Covid period? 

3) Are you working with a property manager? 

Regarding your questions:

1) They are still protected from eviction in certain cases

2) This is a problem that we are seeing with higher income tenants, however, there are repercussions for intentionally lying on an affidavit, and if it wasn't the case at the time, but it is the case now that they make too much money there are potential recourse actions that you have at this time as well. 

3) I would recommend first to go ahead and make sure that all the proper notices have been served to the Tenant.  I would then review your lease agreement to see if there are any other material breaches of the lease.  From there, I would apply for the rent relief program, and once denied, I would then move to operating as normal and providing notices as required, however, I would also pursue eviction at this point as it seems the Tenants are making money, and enough to be declined by the rent relief programs, so they should be able to pay their rents moving forward at least.  

I believe this would be one of the more long and drawn out ways to do this, but I would say this would be the best direction if you wanted to head directly at the problem.  I would also recommend that you work with a property manger.  I am not sure about your daily profession, but I would compare it to, if you were a heart surgeon and you were trying to swap out the motor on my classic car, you probably wouldn't be the person I would choose to do the job.  Find someone who has a speciality and works in these arenas to help protect you in these times and even moving forward.  Just a few personal thoughts of my own.  

I hope this helps!  Sorry it was long winded!

Feel free to PM me if you would like to chat further as well. 

Best

Sunny

@Arthur Garcia glad to hear you’re in the Bakersfield area. Please feel free to PM me if you would like to chat further! Best of luck!

@Courtney Phelps if you’re looking in the Central Valley, Bakersfield is on the rise and with the growth of transportation and logistics in the area we see growth poised for the future. Fee free to PM if you would like to chat further!

Best of luck!

Sunny