All Forum Posts by: Wesley Hu

@Lamont Hyde Cash flow is especially important to me as I do not plan on selling whichever property I buy and hope to collect rental income on it for the long term.

@Frank Geiger The other location isn't really a D, the situation is more like an A location to a B or B- location. The properties are less than 10min apart and the area in general isn't too bad.

Hi All,

I am currently looking to trade a single family home in a prestigious and HIGHLY demanded area into a multi-family, as the rental income on this property is low compared to how much it's valued at. The multifamily location would obviously have to be in a less desirable area, but I would like to know if this decision would be a correct one. Although the rental income would supposedly double, triple, or possibly quadruple, I have no experience with quadplexes that are under rent control.

Does anyone have experience with situations like this?

Thank you all!

Hi all,

I am in the process of purchasing a quadruplex for the supposed high rental income, but I would like to know if there are any costs I should be worried about especially since it is under rent control. The units are quite dirty and the area itself is not as prime as the surrounding neighborhoods. It is renting way below market value at the moment (by up to $30,000 a year). Does anyone else have experience with this?

Thank you all!

@Amit M. I am looking at Belmont or Cupertino. Which do you think has more potential?

@Justin Kane In our area the pricing in general is $150-200/sqft for a normal home (more for upscale materials), so I'm quite worried building an MFR on hilly land will cost significantly more.

The Zoning the city pushes for is planned development zone (PD), although it is an R1 now. The property is a 1min walk into downtown, and the surrounding properties are all renovated upscale MFR. The city seems to push for development as there is a shortage of housing in the bay area.

The previous owner of the properties actually fought against the city to keep R1 residential zoning and only recently got approval to keep it. The city has been pressuring the selling party to create MF up to 20 units as its a large plot right next to downtown. @Brian Spohr

@Matthew Baltzell Our strategy is to hold it in the long term for cash flow, as apartment buildings in the Bay Area are extremely sought after, appreciate soundly year on year and generate great income.

I’m not sure where to find reputable developers as this would be our first time venturing into possibly developing a place.

Thank you for your response.

Hi All,

First post here, glad to discover such a wonderful platform to meet other like minded people.

I'm currently in an interesting investing situation and would love input from other investors!

I'm looking at a few properties to purchase and have narrowed it down to 2.

One is a quad-plex apartment building worth about ~$2mil, and the other is a single family home situated on a hill next to the downtown. Purchasing the quad-plex would be straightforward, although gross rental income would only be around $100k/yr. Purchasing the other house to demo and reconstruct an 8-10 unit MFR would generate much more income for the long run, but we would have to put in a large initial investment and take quite a hit in terms of time.

My main concern is that I have interest in demolishing the house and creating a multi family residential, but we are totally new to this so I don't think it'll be a great idea. We are extremely knowledgeable when it comes to single family homes, duplexes and basic commercial properties, but we have never looked into large apartment buildings. 

Some info:

- The city actually pushes for development of the property into an MFR up to 20 units.

- The front part of the house is totally flat, but the house itself is up a steep hill which is flat on top as well.

- The house itself is quite beautiful and generates $5-5500 in rent per month if we do not demolish and rebuild. 

- Right next to the property is a 20 unit apartment complex, 3 stories, worth $10mil and generates about $650k in gross rental income.

- We have 6 other properties in the South Bay Area, almost no mortgage so I believe we have a higher risk threshold.

Does anyone know roughly how much it would cost to build up to a 10 unit MFR, timeline, etc? We have roughly a budget of around $2-3mil excluding acquiring the property without financing for this particular deal and would look into a construction loan if necessary. I know when it comes to construction every project is unique, but I would like to know if anyone has done anything like this in the Bay Area (Peninsula down to San Jose Area).

I welcome any and all insight, much appreciated and thank you to all who took the time to read!