All Forum Posts by: Sid Naik

I think 25% in sfo is not far . check below report

https://socketsite.com/archive...

@Brian Garlington and @Chad Hale . yes dropping rent that is exactly what I have done .

Its ok for me since it is only 1 unit but think of the mom and pop multifamily owner who has to drop rents for 10 units . I am waiting for that opportunity .  a lot of owners will be largely be unaffacted as Johnson mentioned . some will wilt and sell , some will accept lower valuations .
we need to wait till that happens and by the data looks like it will happen first in bay area which is leading the rent drop in the nation by a large margin .

@Johnson H. thanks for the analysis . need to start ur meetup virtually again .

YEs by december i was being aggressive but the rate at which rents are down is surprising . whatever the reason maybe ( Telecommute, lay off) . I am not sure if this is temporary , time will tell . such trends take time to come and reverse .Sfo is down around 15% already from peak. Good analysis of net turn over being good for landlords never thought so many apts are below market rate .

I still do believe its time to look around december time frame as even the rent moratorium must be hurting some mom and pop landlords who will be in trouble if 30% of their tenant base is not paying for 6 months and be in a hurry  to opt out .  I am just looking where would be the best place to deploy cash and with regular housing not impacted looks like multifamily is the place to watch and that too in bay area or NY as rest of the country seems to be doing fine .

My tenant decided to move out from my rivermark condo in santa clara . I used to easily find tenants for $2700 ( 1 bed , 1 bath) . However its been 2 weeks and inspite of me lowering rents to $2350 I am not even getting a inquiry . for the first time i have posted on multiple forums zillow,zumper instead of my regular craigslist ad .

I had seen it in the news but experiencing first hand is convincing .

Though i am not happy about it, the prospect that rents are collapsing made me excited about the buying opportunity in multifamily that is coming in bay area . At this rate by December NOI and valuations should drop by 25% . Any thoughts ? I don't see much excitement about it in the forums yet .

@Jon Schwartz

I think ur spot on . 

I compare the investment to california to a high growth stock like tesla or apple and cash flow investment to divident play . as long as california produces the googles of the world appreciation would trump cash flow . some people do want steady flow of income so cash flow is preferred but if one is comparing strictly ROI then california would better . However i would say bay area real estate is better poised then LA just because of the fact that I believe technology( software) would drive future innovation in any field from medicine to cars and silicon valley continues to be the leader in software . last 10 years has proven that as well .

As per news  rents have corrected in high price areas like sfo and san jose by 10% . Does that mean multifamily prices will correct by 10% if we wait till end of next year and assuming no recovery in place ? Nobody seems to be talking about multifamly price correction hence asking the obvious . in fact if cap rates tick up slightly due to recession prices will even fall down further . Any thoughts ? 

@Daniel Akerman

Speculation ? Bay area has been doing its magic again and again . As long as facebook,apples and googles keep mushrooming here we will continue to see this magic . 1990 there was a bust , 2001 , 2008 but it rebounded equally strongly . I bought my first property in the worst possible time .. 2006 .. I held on to it and sold it this year . total cumulative gain year over year 9.5% for the last 15 years . If i had bought in good times like 2009 it would be 20% . which place in USA can you see these kind of gains ?  If you have holding capacity ur golden but if I had to sell in 2009 I would have lost my shirt .

@ Daniel Akerman

completely disagree on "It’s like buying an expensive stock that doesn’t give good returns".

I live in bay area and have invested over last 11 years in bay area real estate . It is the best in the country . Nowhere would you have made such returns provided you bought before 2015/2016 .

Agree about ur cap rate comment and it is almost impossible to cashflow . It all comes down to .. do u like owning facebook stock which will go up a lot in value but does not give dividents ( like bay area) ? or you want to own a mediocre company stock which will give u dividends ( cashflow)  every month ( midwest ) .. if you don't have to sell bay area at the wrong time , your wealth gains will be solid in the long run . 

Yes condo is rental in Sunnyvale .

<<No body has a crystal ball so unless you are certain that there will be a fire sale 2/3/4 years while you are in CD's, stay in the real estate game>>

Agree but the best money is made when there is blood on the street . IT would be too easy of investing if u just keep on buying real estate all the time irrespective of the cycle . I am not sure if I should sell but I am very clear on not to buy now . 

Yeah I want location diversity as well  and want to get into MF , that is why was planning the sale anyways .  

Thanks for ur valuable inputs Paul , would love to learn more from you on the MF front .

@Amit . thanks for the 3rd option .

Do u know any bank which does line of credit for investment property . bofa and chase do not  .