All Forum Posts by: Amit M.

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.

I'll start by quoting you: "The real estate market here never ceases to amaze me"

Why do you think that will change in the future? Will the tech juggernaut disappear? Will there be more land? Will the Bay Area somehow become undesirable? Answers: No.

You made a good move buying this in 2008. $4500 income, your mortgage, taxes and insurance are probably around $2000-2200? So this cashflows like a ****! I'd keep it and refinance to pull cash out, which you can use to buy another house here to meet your needs. If you want to maximize investing, try buying 2-4 units again (with a good enough unit for you/family.)

Only way I'd sell this (better to 1031 exchange of course) is if you want to move out of state. But why, you're establishing an asset base in a very prime area. That's what I did in SF. Worked like a charm, and now I live off my rentals and get to play on the internet, take nice walks, extended lunch outings, etc.

"Also I feel in the Bay Area you have to bank on appreciation"

That's because there is a ton of appreciation in the Bay Area. As @J. Martin

Some here pooh pooh appreciation as being speculative, but that is wrong. You live here, you know about the housing crush. I invest in San Francisco and live off my properties. Of course SF is super intense and crazy with all the new tech $$$ pouring in, and the battle over rent control continues unabated. But I managed to position myself with a few non rent controlled condos, and having those in this city is basically like printing money.

My suggestion: focus on local areas, learn them well, and figure out how to profit from future appreciation. I'd skip flipping; maybe buy 2-4 units that needs some work, and where you can increase the rents afterwards. (Use FHA for low down, so you have cash for the renov.) Do that in an upcoming area and you will do well in the next two years, and create a base for future acquisitions.

you're talking about a 4 plex in SF? How do you plan to deal with rent control in your bldg? Do you have a plan/idea for future upside on the bldg? I highly doubt you'll break even with 3.5-5% down.

as I told another budding LA investor asking the same thing: cash-flow pays the bills; appreciation makes you rich.

I live and invest in San Francisco. I own 2 small buildings, one converted to condos, the other in process. I live comfortably off the income (av rent over $3200/unit.) I have a ton of equity, and will be making another purchase soon by leveraging part of that equity. I hardly spend any time on prop mgmt, as my tenants are stable and all professionals. It's a cinch.

Whenever I go to local RE clubs, there is a reason why so many out of state investors looking to raise capital frequently come to pitch their projects to us CA investors; all the money is here.

My suggestion: figure out a way to buy locally. Try to by 2-4 units where you can owner occupy. You get the best rates, are close to your tenants, and can learn the ins and out of landlording. Buy in a decent, upcoming area. Even consider a larger down payment (if you can) or take a reasonable negative cashflow you can support. You'll learn a lot, and if you choose a good area, will probably reap some nice equity over the next 2-4 years, which you can later tap into to help fund another purchase.