All Forum Posts by: Xin Jin

@Daniel Lorence you are absolutely right about this is not a good investment property if you are only going by the numbers. Per @Edward Liu suggestion, you would get much better cash flow properties elsewhere.

Having that said, consider the following:

1. You are competing against people who are buying a place to live like yourself. It is not purely an investment for this population. Considering most SFR are selling for more than $1m, it is reasonable to have a price target of $1.2m because the cross-over from SFR buyers.
2. Appreciation in a core rental market is positive in the long run.This is factored into the valuation of the property.

I have worked with a lot of houses like in Berkeley. They all tend to end up being major remodels at the end regardless of the original intent. It sounds like the one you are working with has fair amount of deferred care.

It is better to do it right and do it once. They will get higher rent and higher resale at the end. It will take longer. But it takes much longer to start with a small project and end up with a bigger one if you go down the slippy slope route.

It’s hard to make a offer competitive with inspection contingencies in Berkeley. Foundations are not that expensive to replace in the bigger scheme of things.If you really want to house, do you homework ahead of time, make an offer and they can live with, and go for it. By the way, I am an investor and resident in Berkeley. Good luck with your search, it’s a Good place to live despite his flaws.

@Nicholas Leone I have done several multi projects in the C-SA zone. It is tricky to get projects entitled in Berkeley because they increased the BMR requirements from 10 to 20 percent. Not sure what kind of project you are trying to do, but you have to have the patience for the city's backwardness.

@Jan H. This seems like a deal worth exploring.

The biggest question I have for your friend is how he get the project done with permit in 6 months. I deal with the City of Berkeley all the time, that estimate seems a little optimistic to me. If you do the project without a permit, is that ARV realistic?

Also make sure it is not in a slide zone. Good luck.

I would have to agree with @Amit M.

Invest locally is a great idea. I have seen people getting slaughtered over the years investing out of state. Most local investors fair much better. I am not saying it cannot be done, but the average Joes do better investing locally.

@Scott Ozawa, low ends in certain parts of the bay area got hammered during the 2008 down turn. I could have bought many properties in east oakland for $80k back in 2009-2012. In retrospect, I should have.

Welcome @John Jacobs

I have been doing exactly rental/development and BRRRR, mostly in Berkeley and Oakland. I think it is a great long term strategy.

However, I am also a value investor and I follow Warren Buffet's methods and I only buy when I see value. Unfortunately, I have not been seeing much value in the market place of late. I am not saying there are no deals out there. In fact, I got lucky a couple of times last year. But most of deals out there do not past my screening any more.

Good luck with your ventures, be aware that the correction will happen again. Nobody knows when, but it will.

Just like anything else, the population and movement of people fluctuate with the local economy. When the dot com bubble burst in 2000/2001, the traffic in the SF Bay Area got a lot better because a lot of "mercenaries" left. Right now, the traffic around here is worse than ever. It would be nice if more people left because the infrastructure cannot handle how many people we have. The system/market has a way of balancing things out.  

@Brittany D. Vallejo has a ferry service that takes you directly to the Embarcadero. It may be the most reasonable place for your situation. Richmond is a good option because there are BART stations there.

Having that said, you may have a hard time finding anything of quality under $450k right now. @Amit M. said it better than I can.

@Laquel W.You should not try to target any particular segment of the buyer population. List the house as-is with a realtor you like and let them get you the top $ you deserve.

I am heavily invested in the Berkeley market and I can tell you that it is a good time to be a seller. Good luck with the transaction. Investor types will try to buy the property from you off the market. Don't do it. That will only benefit the buyers, most of the times.