All Forum Posts by: Amit M.

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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. 

Yeah as long as you have the financial reserves to both invest in the unit *and* have it vacant for the time required to do the work. I’m also doing some capital improvements during this sh!tty rental market. It will pay off in the long run, and especially worthwhile if you plan to hold the property for the long term. 
hope that helps!

I bet that we will have high inflation in the next several years, do to the increased money supply. That will bode well for RE investors that: 1- have fixed rate loans 2- have some leverage (debt). Basically everything will go up (incl. salaries, your rents, your property values, etc.) But because you have RE assets with the big costs fixed, you’ll benefit big time. And the difference between your new inflated rent profit vs. your (now also inflated) incidental expenses will be your expanded financial profit. 

Yes rents are In general softening In SF, but there is a lot of BS hype by the news media too (this article isn’t nearly as bad as some other though.) Basically rents are dropping the most in over rated class A bldgs full of “luxury” amenities. Class B units, in my case are on average down about 5%, so not too bad. 

Also, the “exodus” is overstated. It will be short lived imo. People will start comIng back early next year, so this is temporary.

SF is still an awesome city, and there are a ton of employment and entrepreneurial opportunities here. I’m not sweating it :)

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