All Forum Posts by: Stephen G.

Presumably you work or have an office on the peninsula which is why you're ruling East Bay out? If you are remote, Oakland gives you a lot of inventory with great lifestyle (food, accessibility, etc) and a bette price, but the schools are lackluster (although changing).

We did the live-above-tenants thing for a year, and enjoyed it because our tenants were incredible but candidly were ready to move. 

You definitely give up on a few things - complete privacy (multi-families are old, with thin walls and creaky floors), sharing a backyard (we never felt comfortable having friends over and having too many beers on weekends or holidays), and we were always in landlord mode mentally (let us know if you need anything! oh wow ok I'll take a look at the dryer etc). Even if your tenants are practically perfect (which ours were!), this dynamic always existed for us - your mileage may vary. 

I'm glad I don't have to live above tenants again. I will unlikely live above tenants again unless I need to. 

After a 20 second review, there's way more inventory in San Jose than any other part of the Peninsula but there are cute exceptions. The million dollar question (quite literally) is- what are your numbers/budget? Did you purchase your SFH for $1M and it's now $2M and you're hoping to keep PITI around $5k/month after rental income? If so, you could purchase something for $2.2M ($1M down, PITI at 3.1% for $1.1M would be ~$7k/m, rent inlaw unit out for $2k/m so your nut is $5k/m) or purchase something for $2.5M but you'll need at least a 3bed unit (PITI would be closer to $9k/m but if you can rent out a unit for $4k/month, you're good). Here's an example of the latter - https://www.redfin.com/CA/Menl...

Hope this helps! Understanding your budget/numbers would be helpful.

Your realtor should have a staging co/partner to recommend here. We used Grubb as our realtor and they had excellent, classy, and clean furniture. 

In the not too distant future, my tenants might be moving out of their 3/2 unit and I would like to convert it to a 2/1 and 1/1. I would need to install a kitchen in the new lower unit and potentially a laundry unit. It already has a separate entrance so that helps. 

Is the process:

1. Engage the city for approval

2. Engage a contractor for plans

3. Submit to city for approval and permits

4. Begin and complete work

Alternatively, I can tear down the detached garage and install a new unit or duplex there but that sounds like more work, more time, and more investment. 

If you’ve gone through this process in Oakland, I’d really welcome your feedback! 

Wanted to update as we're here 2 years later. Some learnings:

1. @Brian Garlington's feedback was spot on. I posted on Craigslist + Zillow which federated out to Trulia, Zillow, and I believe Zumper. Zillow had a ton of noise with people requesting views and not really following my requested process (email confirming you meet criteria, about yourself, etc) so I rarely had anyone come to the open house that initially came from Zillow. The power of Craigslist in the Bay Area is real. With Craigslist, I refreshed the post every ~4 days and filled the unit within 10 days. We probably had 30+ inquiries, ~9 back and forth conversations, and 4 final applicants per unit. 
   
   
2. No smokers, pets, evictions, felonies, etc.
   
   
3. Credit score >750, Gross income >3x monthly salary with a bit of cash cushion (we paid a premium to be in Glenview so we attract a high quality tenant).
   
   
4. Once I could screen the applicant and they confirm they check all boxes above via email, I would tell them about a Saturday 11am-1pm open house to create a bit of excitement for all qualified tenants coming at the same time and seeing the competition (taking a learning from Oakland real estate brokers :).
   
   
5. With the qualified tenants that showed up and shared excitement about the unit, we used cozy.co to have them apply and pay for the background/credit check themselves. This was an incredible service. Qualified tenants had no qualms about paying for this service, and the UI in cozy is unbelievably helpful. Background, criminal, credit/debt, income checks all displayed in a single dash to help you make a much more holistic decision. I can't stress how happy I was with cozy.co. We chose the top tenants that were the most qualified on all areas (great income, great references, great stable jobs, low debt to income ratio, etc).
   
   
6. Once you make a decision, you can extend an offer and make an ask or two (eg do you mind maintaining the backyard a bit so I don't need to every couple weeks?) This helps cuts down on other annoyances/fees associated with managing a property. 
   
   
7. We bought a home warranty and it helped us with a dishwasher breaking. All home warranty service is notoriously disappointing so be prepared.
   
   
8. I have a handyman that I call when things go awry (maybe once every quarter). It comes with the territory of purchasing a 100 year old building. I chose my plumber from Yelp and they're fast, efficient, gracious, etc. My capex is averaged out to be around $300/month because we had a mold issue. 
   
   
9. We accept rent every month via electronic transfer or check deposit into our checking account. 
   
10. Our rental agreement was boilerplate by East Bay Rental Housing Association that Daniel Bornstein then tweaked to make more owner-friendly. 

Overall, we've been super lucky to have amazing tenants and have the mortgage paid down as our property appreciates 5% YOY. We do not break even however and probably cover around $500/month between all expenses but that will change when we formally convert the duplex into a triplex.

Lois what did you decide here? I am in the same situation this summer. Thanks!

Man this thread is a dumpster fire. Annie - I'd get in touch with Daniel asap vs spending any more time here.

I can’t recommend Daniel Bornstein enough. He’s very reasonably priced and you get an incredible amount of value. There are multiple strategic paths here and you want his professional input. 

You can likely do an owner occupy move-in if you haven't done that within your building (read: not unit, the entire building) before. You only get one of those once. Even then, you will likely need to provide cash to cover their moving costs. The best move is to communicate to the tenant that you plan on re-occupying the unit, and you're giving them a 3-month notice. Ideally they will leave on their own accord. 

DJ is correct. You don’t have any options here. You can’t owner occupy protected tenants. 

@DG A. - what did you end up doing? My lot is too small (3k feet) but I have a large gap between my garage and my duplex. I would like to tear down the garage and build an ADU or second unit. It sounds like I can't legally turn it into a triplex unless it meets 7500 sqft?