All Forum Posts by: Amit M.

@Susan Tan
Why don’t you look in Oakland? There are affordable and walkable neighborhoods, plus it’s central to everything. You could also consider 2-3 units if you don’t want to live with roommates. (If you take the smallest unit, and rent out the biggies your cashflow situation will improve.) And you can also target up and coming areas, so they gentrify and evolve as you live there. So you’d basically gain appreciation from both “house hacking” and neighborhood gentrification, as well as live in a walkable neighborhood. A three-fer!

@Justin Thorpe as to replies to your original question...crickets...crickets!

Personally I think trying to time the RE market is a foolhardy endeavor, especially for private investors like most people on BP. If you already own property now, to sell it at the high, wait, and buy again at the low is almost impossible. Think of it, you’re going to pay 5-7% sales/transfer taxes, plus capital gains up front. The dip you’re speculating on better be significant, and you need to time it right. Not likely. 

As for RE funds and sponsors, that’s perhaps a different story. They basically raise funds, so they can build a war chest in anticipation of trying to buy at, or close, to market lows. But those sponsors are also the same ones that raised money in the last 2-3 years and also brought property then. Especially if it’s commercial, I bet a lot of those sponsors are going to have a difficult time delivering the profit spread they were predicting 2-3 years ago. Their job is basic to raise money and invest it, at whatever cycle  the market happens to be in. 

@Roee Hazut you fail to say what city and state you live in. Hard to advise without this basic info!

@Steven Jackson unless owner can deliver it vacant, I would NOT take this risk. And if it’s delivered vacant, locks must be changed and any floor level windows boarded up. Property must be secured!

Also you  and current owner need to check and see if “anyone” put any utilities under their own name, and that must be changed. Basically, if these squatters are smart, they put a utility under their name (pg&e is easy to change btw). And once they are there 30-32 days, YOU ARE SCREWED! They can claim a de facto month to month  lease. It’s enough to make it a court issue, not police Coming in and kicking them out for trespassing (and especially in today’s heated racial climate...good luck with that!) Court won’t deal with this for months due to covid. Plus squatters can claim covid effected them, etc. to delay further.

So...unless delivered vacant, and bldg secured, this could easily be a cluster of epic proportions! On the plus side, I doubt it will sell in this climate with squatters (unless owner want to sell for super cheap).  So you may well be able to force the issue with the seller. Just be patient :)

Good luck, and keep us posted!

naivety

on

display

————

3words

My response from a similar post:

“I think the recent work from home hysteria is a fallacy. Conceptually, working from home has NOTHING to due with covid 19. If it’s so awesome, why wasn’t it adapted en mass years ago? Yahoo a couple years back even rolled back WFH. It’s a trend that will have some effect yes, but it’s being way over hyped. For two main reasons: 1- I’m not sure it will really provide long term benefits to the tech firms jumping on the bandwagon now 2- I’m not sure how many employees will ultimately like it, after the forced-Covid-novelty wears off. i.e. it’s hard to get all those cool tech co benefits like free gourmet food, gyms, awesome office spaces, etc., etc. piped over a zoom meeting ;)

As for WFH effect on the Bay Area, keep in mind that when people work from home, their direct environment becomes MORE, not less important. Would you rather be home based in the Bay Area with tons of things to do nearby, good weather, lots of nature, etc. or someplace with little culture, extreme temperatures, bland immediate environment, etc., etc. There is a reason many people, who can afford to do so, aspire to live in CA and especially the Bay Area. Working from home isn’t going to radically change those aspirations.”

WRT downtown condos, those are usually not the best investments anyways. No upside as you pay a premium. They do crash harder (as in 2008-09), so I guess some people made money by buying them on the dip. But if you invest in residential S.F. neighborhoods, add value, and also buy in gentrifying areas (as I have) you can do very well.

Lastly, as for S.F. quality of live, etc. Yes it's at a downturn now and there is some flight, but that will blow over in 1-2 years, and young folks will return en mass. There are still people coming in now with new professional jobs, it's just not as crazy as before. Same thing happened in lower Manhattan after 9/11. Market was soft for 1-2 years, and then back on. Cities like NYC and SF have intrinsic qualities that just can't be found in the surrounding burbs.

Will there be another leg up on this chart by 2030? I bet there will.

My response from a similar post:

“I think the recent work from home hysteria is a fallacy. Conceptually, working from home has NOTHING to due with covid 19. If it’s so awesome, why wasn’t it adapted en mass years ago? Yahoo a couple years back even rolled back WFH. It’s a trend that will have some effect yes, but it’s being way over hyped. For two main reasons: 1- I’m not sure it will really provide long term benefits to the tech firms jumping on the bandwagon now 2- I’m not sure how many employees will ultimately like it, after the forced-Covid-novelty wears off. i.e. it’s hard to get all those cool tech co benefits like free gourmet food, gyms, awesome office spaces, etc., etc. piped over a zoom meeting ;)

As for WFH effect on the Bay Area, keep in mind that when people work from home, their direct environment becomes MORE, not less important. Would you rather be home based in the Bay Area with tons of things to do nearby, good weather, lots of nature, etc. or someplace with little culture, extreme temperatures, bland immediate environment, etc., etc. There is a reason many people, who can afford to do so, aspire to live in CA and especially the Bay Area. Working from home isn’t going to radically change those aspirations.”

WRT downtown condos, those are usually not the best investments anyways. No upside as you pay a premium. They do crash harder (as in 2008-09), so I guess some people made money by buying them on the dip. But if you invest in residential S.F. neighborhoods, add value, and also buy I gentrifying areas (as I have) you can do very well.

Lastly, as for S.F. quality of live, etc. Yes it’s at a downturn now and there is some flight, but that will blow over in 1-2 years, and young folks will return en mass. There are still people coming in now with new professional jobs, it’s just not as crazy as before. Same thing happened in lower Manhattan after 9/11. Market was soft for 1-2 years, and then back on. Cities like NYC and SF have intrinsic qualities that just can’t be found in the surrounding burbs.

Sounds like your property manager sucks, and dumped on you a total loser-tenant :(  

did he even vet her? What is her job?  she lives there alone...except for recent baby-mama-drama? 
yikes!

@Michael Hyun and @Johnny Hoang

You guys have the right approach imo. As someone with 20+ years experience who has done similar (with 2-4 units in SF, not SFH house hacking) I urge you to focus on the long term, which is more than 5-7 years imo.

First you need to account for the fact that we’re at top of market, in a recession And corona (of course). You’ll need to make a determination of when you want to buy, either soon, or after things seem to stabilize. Of course rates are great now. 

But more importantly, if you believe that prime Bay Area will continue its appreciation trajectory *long term*, you stand a good chance to benefit from it in the next 10 years. There is also the unknown of eventual inflation (3-5 years from now), which may benefit those with fixed 30 year loans big time. 

Basically what I did was buy, add value, wait, and pull equity out to buy the next property. I avoided selling, so I could expand my portfolio. What you will realize, is that appreciation moves erratically. It can be flat or even trending down for a few years, and it can kind of suck owing RE then. But hang in there! Then you will have those crazy years where you do nothing and values go up 10-15% in one year!  (Rents also go up, so what was middling cash flow becomes great.) you want to own property during those golden years. Bottom line: that is where you will make the big bucks. You must focus on the long term for this to work, 10+ years. Think of it this way, how many people do you know that have sold prime Bay Area RE 10 years ago and don’t regret it now? (crickets...)

best of luck!

I’ll leave you with my fave chart:

My gut says that this thing is overpriced by a couple/few hundred G’s. $1.3mil is San Francisco pricing...so unless this place is amazing in size and quality (doesn’t sound like it)...it’s overpriced.