All Forum Posts by: Amit M.

^ yup....holding my breath for Prop 21 to fail and get flushed down the CA toilet! And given the latest polls, it’s likely to fail :)  But to all you CA peeps out there, vote damnit, vote!

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I’d make sure those expected $4900 rents are not 2019 pre covid #’s :)

@Sid Naik I highly doubt 20%. As @Johnson H. discussed, prices are sticky on the way down for a variety of reasons. There is some price softening in multi family in SF, but it also depends on the bldg’s overall desirability. 

Just watch and track SF multi family sales to see what happens. IMO this winter will be soft, and may stabilize spring-summer 2021 IF major external events (vaccine, election results, economy) don’t go off the rails. 

I'd look into legalizing the "illegal inlaw", or add it as an ADU. (I'd look into the illegal inlaw legalization first, because you may be able to grandfather in some existing conditions, making life easier.) It will cost you $$$, but having a 3rd legal unit should add significant value. Really depends on a ton of factors like inlaw size, potential to be nice unit, how easy it will be to legalize it, etc. you'll need to invest the time to better understand this. Perhaps your realtor can help you get some preliminary opinions before you start spending money.

The SF rental market is very tricky now, and frankly has been hard to pin down. March-May was weird as we went into initial lockdown and nobody knew what the hell was going on. Then it improved a bit in the summer. And as of September it has gotten a lot worse. A big part I think is SF LL’s are/were in denial, and now some are getting more desperate and hence number of listing is up. (Personally I’m glad I dropped my rents as needed and got everything taken care of by late summer ;)

The other factor is that rent drops are highly dependent on location and unit/bldg type. High rise fancy condos in CBC are definitely down big time. Other neighborhoods are case by case. For example, I took a big hit on a 3BR rental in the mission, but only minor rent drops on my 3BRs in Bayview (which is more of an up and coming neighborhood.)

As for predictions, my crystal ball says: this winter we will reach nadir, and hopefully things will bottom and stabilize by spring/summer 2021. Then depending on a lot of things like vaccine, elections, economy, rents will start to slowly improve in 2022. This is for SF rentals only. 

In general, I think the FIRE movement is on “fire”, so I’d cast a cautious eye

@Sid Naik keep in mind that suckitsite (sic) is run by a pretty biased person with an axe to grind. As for San Francisco rent drops, again it depends on the neighborhood, unit size and amenities. Certainty new construction high rises In DT and SOMA are taking a big hit (like 20-25%) but others are much less, to the tune of 5-7%. I also think this winter will be the nadir, and spring 2021 will improve. Basically some of the LL’s in denial this summer are now getting desperate, so the rental market is particularly soft now with that hangover inventory. But hopefully that inventory will work itself down, and spring 2021 will be an improvement. (I’m glad I got my rent reduction sh!t together pronto this summer, and filled my vacancies without waiting too long ;) 

Numerous people here took the time to write quality suggestions. I’d be nice if OP made efforts to acknowledge this...

@Jonathan Levi

@Jonathan Levi shalom

I read your post and your bio, and yes you have a challenge in picking a viable RE investment strategy for your situation. While it sounds like you did well with your Bay Area townhouse, if you're not living locally it will be difficult to buy locally (my preferred approach) and add value to the project. Worse case just keep the townhouse until something clearly better comes along. Yeah we're in a market dip now, but you're sitting on prime real estate in Santa Clara (although holding an SFH would be more ideal) which will preserve value and appreciate long term. During that time rent will increase, you'll pay down the loan, write off depreciation, and keep property taxes low (prop 13). That's your default position IMO.

As for NNN, the challenge, as @Joel Owens mentions is that the safest properties aren’t usually appreciation plays. More like wealth preservation. And anything lesser in commercial, you better really know what the hell you're doing, which takes a lot of experience. Or, you end up doing deals with syndications, managing partners, funds, etc. Then you’re totally relying on their talents. Also keep in mind that they have a job- recruit funds for their projects. Cyclically we just started a down market, and I believe that some of the recently formed syndications (especially those based on pre covid analyses) are going to get spanked. Hence, I personally don’t like giving up control and investing passively. I prefer investing in prime quality markets which I know well.

Sooo given all that, I’d ask you if you gave any thoughts to investing locally in Tel Aviv. Although to an outsider reading this it may seem like a whatever market, we locals know that Tel Aviv is prime real estate. Even if it’s not SF or NYC, as long as they keep making Jews (joke;) Tel Aviv will always have a built in global market, which helps keep it stable in bad times, and juices up returns in boom markets (similar to SF, etc.) Plus with the recent peace accords with UAE and Bahrain the region just got a major development and investment financial boost.  I think it’s worth looking into. Personally I’m looking to buy a 2nd home in TLV in next year or two. Tama 38 is interesting to me for instance. And there may be other opportunities in less expensively markets for rentals. Only thing I find challenging in Israel in general with rentals is that the rents are low relative to the apartment costs. It’s the same thing in San Francisco, but here I know how to add a ton of value to change the fundamentals of the asset (I detail this in my BP profile). I imagine there are ways to do the same in Israel. I’d be interested in your take on this.