All Forum Posts by: Taylor Ferris

Hi @Arthur Yu, welcome to BiggerPockets! I've found it to be an amazing community with lots of great advice. 

The 1-2% rule works better on less expensive properties and as a result doesn't work very well for the high priced properties in the Bay Area. So you're not doing anything wrong it's just not a great rule for our area. Check out this Blog Post on The 2% Rule for some more information. 

The 50% rule works a little better but can still be somewhat misleading. I suggest checking out the Four Square Method. It requires more work but you'll get a better handle on estimating expenses vs. income. 

@Gagan Chawla & @Fernando E. I'm also interested in having an opportunity to discuss strategy with other like minded individuals in the Bay Area. Always open to sharing my experience and learning from others. 

Are you guys open to getting together in the next couple of weeks and grab coffee?

@Tim McGarvey just sent you a PM

@John Knisely - Thank you for the suggestions I'll see how can make connections in those offices. 

@Charlie Parce - Funny you should ask. I proposed buying the tenant out to my family members and they decided instead to dig in there heels and wait him out. Fortunately, because of the actions we've taken against him he has stopped subleasing or putting the unit on AirBnB. His rents are still below market but at this point we just plan to leave him be. 

@Calvin Kwan - Thanks for correcting me on the OMI situation! That is obviously much more appealing. 

You're correct that you don't need to change the lease when a new tenant moves in, you can just add an addendum. As long as they are added as sub-tenants via the addendum who will then pay rent to the master tenant who then pays the landlord, you can raise the rent after the master tenant moves out and you'll have better accountability like you said. I may have overstepped when I said don't add them to the lease, what I meant was don't create a new lease where they are all equal co-tenants and don't add them as co-tenants to the original lease as they will have the same rights as the original tenant. Be careful of the language. 

That said, if the lease allows subletting do you know if you can require the current subletters to be added to the lease as sub-tenants w/ the addendum or is that something that you need to make sure you catch when a new sub-tenant moves in? 

@Eric Chang - What does it say in the original lease with regard to subletting or adding new tenants?

Thanks Katie for organizing the event! Had a fun time connecting with folks this past Sunday. I didn't get an opportunity to sit down with you unfortunately, I'll make sure to remedy that next time. If you need any extra helpers in the future, let me know! I'm happy to help :)

Hi Eric, don't put all of the tenants on the lease. If you create a new lease keep the long term tenant on it. Since you inherited these tenants you are subject to the terms of the lease that they currently have on the month to month. You won't be able to make any material changes unless the tenant agrees. Once the original tenant moves out you can raise the rent to market even if the tenants who are subleasing decide to stay. At that time you would put them on a new lease. If the original lease allowed subleasing you can't unreasonably deny the original tenant the opportunity to sublease to a qualified candidate as a one to one replacement of a departing tenant. Check this link out http://www2.oaklandnet.com/oakca1/groups/ceda/documents/policy/dowd008121.pdf. If you plan to move into one of the units you can do a just cause eviction as an owner move in. You would need to live there for, I think, 2 years after the fact. If you go this route, just know the eviction process is not straight forward even when it aligns with one of the just cause reasons. One cool thing is if you decide to move into one of the units and you live there, after two years your property is now exempt and rent can be raised on the tenant occupied unit to market. This works in multi-family properties up to 3 units. http://www.oaklandtenantsunion.org/know-your-rights.html. Before you decide to do anything make sure you do your research because you don't want to have to deal with the rent board. If you have detailed questions about rent /eviction control and tenant rights in the East Bay I can recommend an attorney who specializes in the area.

Something else to consider, most cities in the east bay either have rent/eviction control or are planning to adopt. While I love the east bay (I'm an east bay native) and advocate for investing in a place you know and be involved with day to day it's hard to make the numbers work even with off market deals. On top of it even if you find a good deal you'll likely deal with tenants with below market rents and if you have problems with any tenants the eviction process is arduous and expensive Not trying to scare you away from Oakland just want you to be aware of the challenges. I mange 10 units in Oakland that my family owns and have a tenant with below market rent who was running an airbnb out of the unit disturbing our other tenants . He was in breach of his lease and to this day we have been unable to evict him. Just food for thought. I live in Oakland and would be happy to get together to talk further if you're interested.

Hey Bryan, I'm a Realtor who specializes in Oakland. Been here my whole life and would be happy to share some insight and see if it makes sense to work together. Feel free to PM me or text me if you're interested.