All Forum Posts by: Amit M.

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At this point (since you already sold/triggered your 45 day ID window) STNL NNN is probably your easiest and safest option. Do you have a reputable broker working for you to review deals?

Joel Owens is a NNN broker who frequently posts here, who may be a good contact for you.

@David Song It’s hard to predict the sequence of events because every economic cycle is different. But I think that high inflation will tend to effect real estate in a positive way more towards the end rather than the start of that phase. I think interest rates going up can happen quickly (set by the Fed), and that will have an immediate downward effect on RE values. It will take more time for inflation to effect everything else like increased salaries, higher consumer goods prices, higher rents, etc.

As for being bullish on Bay Area RE now, I think it highly depends on the property type and location, though I personally am not as optimistic as you (but that’s what makes the world go round :) At least for San Francisco and possibly other prime core Bay Area towns, I think multi family will be challenged as rents have dropped and it will be several years before we reach 2015-2019 rent levels. And office and retail have a lot of challenges. Maybe bold moves (i.e. property repositioning) with a 5-7 year time horizon, if you bet well, will be big winners. 

I know outlying areas have done well with SFH price increases, but as core Bay Area softens more people will look again to staying central. So I don't think places like Sacramento, Tracy, etc. will have a long unimpeded runway as pricing naturally balances out.

I agree that increased stimulus spending, and large capital projects the Biden administration hopes to roll out will drive inflation rates higher at some point. And I think good RE locations with good long term financing will likely get an accentuated appreciation lift. So with Biden in, I’m biding (sic) my time and waiting for some iteration of that ;)

@David Song I think the primary effects of inflation on housing have two opposing forces: 1- higher interest rates put downward pressure on values. 2- but eventually inflation effects everything like salaries and rents, so then the asset values inflate along as well. It’s not really predictable the sequence and timing of events, so as usual, the best scenario is to be able to hold assets through these unpredictable iterations, because eventually the effects of elevated inflation will lead to higher real asset values. 

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3words

This decision really depends on your long term goals. If you believe in the long term appreciation of LA (I do, for the better areas) then I'd keep it, rent it out long term (only to qualified tenants to minimize risk) and pull money via refi when you can and need it. It's hard to buy a relatively expensive SFH in LA and get it to cash flow, so that's an achievement on its own. And if it's in a decent neighborhood that is continually improving, then that's a golden ticket to significant appreciation in the future. If it's in an area that will only improve marginally, then that's a different calculus. To put it simply, long term appreciation is where the big bucks are made in RE, and prime CA locations are the center of gravity for that to happen.

@Justin Thorpe I’ll also chime in agreement: what makes the Bay Area unique is the scarcity of land, which does not exist in TX and other high growth markets. Austin already has crazy sprawl, while the baby area is taking a breather. All markets self correct and nothing goes positive forever. Be aware of the cycle yes, but more importantly, buy quality locations worth holding for the long run. Sure a downturn sucks, but it’s temporary, especially in blue chip locations. 

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my2c

Keep DSTs in your back pocket as back up options.

my2c

If your needs are pretty straightforward (which includes real estate btw), you can save a lot of $$ by going with someone like California Document Preparers. They’re based in the Bay Area, have good service imo, and only charge about $750. A lawyer will cost you several thousand, and it’s usually not necessary as most trusts are boilerplate (again, unless you need something very special.)

Good luck

You need a high down payment, deep pockets to weather the rent collection risk over the next 1-2 years, and a long term perspective (7+ years) for this to make sense. Usually well capitalized* established portfolio SF investors buy properties like this, as they can add it to their mix, and wait for the longer term upside. 

*meaning they already have made a lot of money in the SF market; newbies bettering the farm on a non value play expensive property, not so much.