All Forum Posts by: Stephen G.

I think you can have your cake and eat it, too. Here's an example:

https://www.redfin.com/CA/Oakland/2737-Vallecito-Pl-94606/home/2044722

Each unit is 2b and has market rent of $2k per month (maybe more) in that neighborhood south of Lake Merritt. Owner Occupy one; keep collecting rents from other two.

Even if the renters are rent controlled, after living in your unit for 2 years, you basically get a one time "charge market rent or leave" card; it's a rent control loophole. Bam - now your tenants are paying your mortgage (if they weren't already) and you're living for free. After one more year, you can move out, find a replacement tenant, and can cash-flow $1k - $2k per month in a B-class neighborhood. 

Daniel Bornstein has been great to work with. 

1. If you buy a fully tenanted property, you can evict one as long as it's an owner-occupy. Just make sure it's not a protected tenant. 
2. You need to live in said unit for 2 years.
3. After 2 years, you can raise the rent to market. 

Super helpful links:

• https://www.tobenerlaw.com/oakland-rent-control/
• http://rapwp.oaklandnet.com/issues/exemptions/

I would absolutely have your ads in Spanish below the English. Include Spanish in the title as well. 

Great pictures are also incredibly helpful, especially on Craigslist. It won't take you *that* much more time, and the results make a huge difference. 

This is Bay Area investing. :( Homes here are long-term equity plays, and the numbers make less and less sense every day. I haven't been able to find anything lucrative for a year. My .02 - wait this market out, or put your cash into cash flowing properties out of state. The market is cyclical, the administration is very unpredictable, and the Bay Area is at record home levels again. Even the surrounding areas (Fairfield, Tracy, Gilroy) are pretty nuts right now. If you want to buy and live in Bay Area, just hold tight.

Yeh, the Bay Area is an equity growth market and not cash market (unless you buy in east Oakland/Richmond or outside of the 40mile radius to SF). Your numbers are right. I've come to the conclusion that - 1. Bay Area TOTALLY makes sense for your primary home, because you need to live somewhere 2. In the next downturn, Walnut Creek and Fremont will look better for long term equity. 3. Granite Bay is the new Walnut Creek.

Oakland is not a cash flow market - it's an equity market. Are the units 1/2/3 beds? If they're all studios or 1b, it's a better opp than a bunch of 2/3b since people don't move out of those. Get info on the tenants. Make sure none of them are protected (5 years in the unit, over 60 or disabled, etc). Those tenants make or break the deal.

Here's my strategy - find a fully occupied triplex because for the reasons above, no-one wants them which means less competition in a red hot market. 

Owner-occupy one of the units (you'll need to justify why you need that specific unit, so if it's a family in a 3br/2ba and you're a single guy, you're stuck with the 1b/1b unit). After completion of Year 2, you can raise rents for occupied units to market rate. After completion of Year 3, move out of your unit and rent for market rate.

After 36 months, you'll have 3 units in a multi-family property that are practically market rate, which decreases the GRM. You can either 1. Get it reappraised to take some cash out and start over or 2. Sell the property.

There's no 1031 because it was your primary, but it's not a bad strategy. BP community - feel free to chime in if there's anything wrong with this strategy. 

^ A friend of mine just bought a SFH in Fremont; 10% down, 10% HELOC, 80% financed so PMI was avoided. It can be done - you just need to find the right property who with a lot of work and a bit of luck.

Tough to find properties like that in Fremont. I've been looking myself and the economics don't make sense unless you're banking on the property appreciating 10% year over year again (which is a risk). Fremont is building. A lot. Lots of condos and sfhs getting built and the schools are already at capacity, so the next 5 years in Fremont will be interesting.