All Forum Posts by: Amit M.

I actually prefer the original source of this report from realtytrac at:

http://www.realtytrac.com/content/foreclosure-market-report/year-end-and-q4-2013-home-flipping-report-7971

It's too bad they don't have flipping data prior to 2011. 2-3 years of data is almost too short to have real meaning. Wish they captured this for 2003-2007.

As for that zerohedge blog, I dunno bro, seems real sketch. Like a weird-tea-baggy-republicany-alarmist-run-for-the-hills typa thing.

I'll try to come out. Click my name to see my profile for my info. Thx.

I must chime in again.

1- as I initially thought, it is an appreciation play, being in a reasonable area (i.e. not in a gang/war zone.)

2- you're getting in at a discounted price.

3- I agree with Minh, short to mid term appreciation is very likely. Same thing happening in my market, San Francisco. All the mid-high end is going through the roof. Folks with lesser means are reinventing C class neighborhoods as we speak. The caveat though is when a downturn occurs, the lesser areas can drop much more than the better ones (just compare price drops in Militias to Palo Alto, during last downturn :)

4- you should have no problem covering any maintenance/vacancy issues with your excess cash flow. Just be smart about it. If it were me and I was planning to hold for 3-7 years, I'd sh¡t-can the pot growers ASAP. Fix and do cosmetics to the basics so it shows well, and get decent tenants in there. The out of state commenters here who rent cheap units at $600-800/month and earn $100 per door have totally different cost structures. i.e. A bad water heater or fridge wipes out their profits for 6 months. You would only lose one month of cashflow.

5- as for when to sell this, that is difficult to answer. If area continues improving, you may want to hold this long term, especially as it cashflows more and if it's easy for you to manange. That's how the big bucks are made.

This is a promising deal IMO, giving you the chance to get a decent property in the Bay Area. But the devil is in the details! Only you can make all the necessary observations to ferret those out. Good luck!

what city is this thing in? You only list Bay Area. If it's in good area it may be worth holding for the appreciation.

even a met lab is over $21k in the Bay Area :)

@J. Martin I caught a light flue this weekend, so will have to see how I feel by tomorrow eve. May have to pass this one :(

Btw, what is up with that home in Richmond for $21k! Are lots basically free there? It sounds too cheap, what do you think is going on there?

I don't invest out of SF, so no knowledge about the second one. Where the hell is marysville?

Other one. It's Daly City, not SF. Good news*: no rent control. Bad news: kinda crappy area, limited appreciation, only appreciated by ~ $180k from 2003-2014 (if it sells for 899k.). Comparison: mission district in SF at least doubled in value from 03-14. Probably more.

What do you think market rates are for those units? Now they're at $1200 each. Remember, no google engineers over there; mostly working class Filipinos I assume.

* a plus: when you go there to manage it, there's a killer Filipino BBQ joint down the street :)

how much is the bldg? What are current rents, expected rents in vacancies?

the 40% down payment # is mor for commercial. 2-4 units should be 20-25% down.

I'd really try to make something happen in your market. You're hands on, so could do a value added play. But the main reason is future appreciation. That's where you'll make your serious money, not on piddly cashflow.

Here's what I'd do: look for 2-4 units with low rents/run down, in the best hoods you can swing. Renovate units, re-rent at best market rate. Refi after 6-12 months, pull cash out for next acquisition. A few years from now you'll be happy you did so.

short answer: it depends. In my case it absolutely was. A- I got major appreciation. B- I was able to pull cash out to buy multi units. It was my main start to RE investing.