Real Estate Investors in SF Bay Area

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Real Estate Investors in SF Bay Area

Mary Griffin
New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes

Hi everyone,

I currently live in the Bay Area (California) and I’m interested in getting into real estate investment. My goal is to start out buying a multi-unit property in early 2021. Ideally, it’d be somewhere in the east bay since I work in San Francisco and plan to live in one of the units for a few years. I’ve lived in the Bay Area (Berkeley, Sunnyvale, and currently live in Walnut Creek) for the last 11 years. 

 Right now I’m listening to the BiggerPockets podcast and Brandon Turner’s Book on Rental Property Investing. I plan to spend the next several months learning as much as I can about real estate investing. I’m hoping to connect with investors in the Bay Area. I’m open to advice on what things I should be doing now, cities are good investment areas, etc. 

I look forward to connecting!

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Account Closed
Member since 2020 · 17 posts · 36 votes
6y

BP has become a cesspool of people trying to profit off one another.

OP asked to network with other SF Bay Area real estate investors asking for advice to investors locally, and in return you get turnkey operators and real estate agents “recommending” other markets. She didn’t ask you for your recommendation on other markets.

Be careful who you take advice from. “Never ask your barber if you need a haircut”

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  • Kenneth Mooney
    Rental Property Investor · Augusta, GA · Member since 2016 · 348 posts · 171 votes
    6y

    @Mary Griffin Are you dead set on purchasing in the Bay Area. I am sure the cost of entry is quite high, is it not?

    0Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Kenneth Mooney the cost of entry is very high in the Bay Area but I’m pretty set on purchasing here because my job is located here. With the cost of rent continuing to rise, I figure now’s the time to buy. I’m open to your thoughts/suggestions on other markets too, as I’ll be looking to expand to other regions in the near future.

    Thanks!

    2Reply
  • Kenneth Mooney
    Rental Property Investor · Augusta, GA · Member since 2016 · 348 posts · 171 votes
    6y

    @Mary Griffin there are many markets you can invest in. I'm biased because I am from here, but I love Augusta, GA. Tons of job growth and they are jobs in secure markets (military, medical, cyber). Many markets in Ohio and Indiana are good. Majority of states in south are very affordable and are great for cashflow.

    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    Originally posted by @Mary Griffin:

    @Kenneth Mooney the cost of entry is very high in the Bay Area but I’m pretty set on purchasing here because my job is located here. With the cost of rent continuing to rise, I figure now’s the time to buy. I’m open to your thoughts/suggestions on other markets too, as I’ll be looking to expand to other regions in the near future.

    Thanks!

     If you do invest out of state I would recommend looking into Columbus, Ohio. Our job and population growth is through the roof!

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  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    I second @Remington Lyman, Columbus, OH is a great market @Mary Griffin!

    2Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Mary Griffin Great decision on starting out locally, especially with a house hack. Talk to other investors and agents that are investors that can give you an idea on what you can expect to find in the market there and also speak with a lender to give you an idea what you’d qualify for.

    With multi family, lenders can use rents of other units to help qualify you for a bigger loan. However, if using fha loan in the high cost areas like yours as well as in SoCal, it might be difficult to get a loan for 3 and 4 unit properties since they have to pass self sufficiency test (75% of all rents cover your PITI including mortgage insurance). If that's the case you may be better off focusing on 2 unit properties which do not have a self sufficiency requirement under fha and you can still take advantage of 3.5% down.

    Best of luck

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  • Daniel Akerman
    Real Estate Agent · Astoria, NY · Member since 2016 · 60 posts · 55 votes
    6y

    @Mary Griffin I’m a Bay Area native, living in NYC, and an experienced Realtor. If you’re looking to INVEST, then your primary concern should be profit and, secondly, risk. I would not recommend investing in the Bay Area for the simple fact that your capitalization rates, which directly impact profitability, are extremely low. It’s like buying an expensive stock that doesn’t give good returns. In addition, the risk is high — especially post COVID — as unemployment rises and tenant protections in California strengthen more and more.

    I would definitely suggest investing in another market and simply farming out the management of the property to a management company. Even with the added expense, you will have less stress and more profit.

    4Reply
  • Account Closed
    Member since 2020 · 17 posts · 36 votes
    6y

    BP has become a cesspool of people trying to profit off one another.

    OP asked to network with other SF Bay Area real estate investors asking for advice to investors locally, and in return you get turnkey operators and real estate agents “recommending” other markets. She didn’t ask you for your recommendation on other markets.

    Be careful who you take advice from. “Never ask your barber if you need a haircut”

    24Reply
  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
    6y

    @Sam Swizzle

    You nailed it.

    1Reply
  • David Song
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    6y

    @Sam Swizzle

    Exactly. Sales person heaven, for OOS TK scammers.

    1Reply
  • Annie Dickerson
    Real Estate Coach · Oakland, CA · Member since 2017 · 59 posts · 91 votes
    6y

    @Mary Griffin How exciting! I live in Oakland and have been house hacking for years. I used to work in Sunnyvale too, for LinkedIn.

    My husband is now a realtor in Oakland, specializing in helping people who want to house hack, and together, we’ve been able to help many people get into multifamily, both here in the Bay Area and elsewhere.

    Let me know if you have any questions as you’re looking at properties - I’m happy to help!

    0Reply
  • Joey McnaughtonPro Member
    San Ramon, CA · Member since 2015 · 6 posts · 1 vote
    6y

    @Mary Griffin

    Hi Mary,

    I’m also a real estate investor in the Bay Area. I have a few properties and am interested in expanding into multi-unit properties and possibly other geographical locations as well. I’m for sure interested in connecting to share best practices, info, advice, and possibly working together in the future.

    - Joey

    0Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Twana Rasoul thanks for the insight and the heads up on the self-sufficiency tests. Do those tests tend to apply to conventional loans too? My understanding of FHA loans, while they offer many perks, have some drawbacks. Am I correct in understanding that FHA loans require that the property be in an "underserved" neighborhood if you make more than a certain amount of money?

    1Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Annie Dickerson

    Great! Thank you! I’m researching different areas in the Bay Area for my initial investment. What are your thoughts on investing in a multi-unit (2-4 units) in the following areas:

    •Oakland (likely east Oakland)

    • Emeryville

    • Walnut Creek

    • Concord

    • Richmond

    • San Leandro

    •Hayward

    •Albany

    •El Cerrito

    I’d like to stay under $1M and not too far from a bart station. From your experience, do you think that’s doable? Are these areas good investment areas? Any areas you think I shouldn’t focus on, or areas I should add to the list?

    I’ve been looking at Redfin and Zillow and I see some properties that make the above criteria, but I’m also wondering if there’s another site I should be looking at.

    Any insight is greatly appreciated.

    Thanks!

    0Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Kenneth Mooney

    thanks for the suggestions. I’ll keep those in mind as I look to branch outside of California in the future.

    0Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Daniel Akerman

    Thanks! While the prices are high in the Bay Area, house hacking is attractive to me because I’m currently paying $3000+ /month for rent. For now it makes sense for me to focus on the Bay Area market while starting out so I can establish myself here before moving to other markets. Otherwise, all of my profits from investments in other markets will be going towards my rent in California :)

    0Reply
  • Mary Griffin
    OP
    New to Real Estate · SF Bay Area · Member since 2020 · 7 posts · 10 votes
    6y

    @Joey Mcnaughton

    Thanks! Where are you currently investing? Any Bay Area “hot” spots you’d suggest I focus on?

    0Reply
  • Doreen M ODonovan
    Rental Property Investor · Aptos, CA · Member since 2019 · 42 posts · 30 votes
    6y

    @Mary Griffin I think the people that are suggesting you buy out of state are just being realistic. The ROI is just better than other places. Find a place that is profitable even after you farm out all of your management responsibilities. I live in the Bay Area and looked forever for a place with a better ROI than the one I had in Colorado. Last year I ended up buying a short term rental in Tennessee. My friend from the bay area ended up buying a couple of multi units properties in Tucson. We both looked in a lot of markets.  When I first started I did Manage it myself so I understand what you're saying, but that was many years ago. I recommend talking to a lender before you get too far into this. Then you can get all of your questions answered about financing before you get too far into looking for property. A good lender will have a recommendation for a realtor who understands residential investment property. Save yourself a lot of trouble and do it in that order. They know which realtors have their act together. Same thing with property managers, call them and ask who they work with. Good luck. 

    4Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Mary Griffin the self sufficiency test is just for fha and the fha loans have limits based on number of units and city. So high cost areas have higher loan limits than low cost of living area. For instance in high cost area like San Diego the loan limit is almost 900k for a 2 unit.

    Just remember that you buying in a low cost, high cashflow market doesn’t make it a “better investment”. Cashflow does not equal total return and initial cashflow overall is highly overrated and misunderstood. Your area has higher priced properties because they are less risky assets...lower priced assets/markets can be higher risk and usually when you have markets with high cashflow and high cap rates it means it is a riskier asset and thus the reason for a higher cap rate. Also high cap rate markets have lower appreciation generally.

    Best of luck out there! Talk to other investors in your area....less risky choice is sticking with your market for first property despite what many will tell you.

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  • Shane Austrie
    New to Real Estate · San Francisco, CA · Member since 2020 · 4 posts · 0 votes
    6y

    @Sam Swizzle

    Is the advice they gave inaccurate? As a community, we should inform newcomers of other options when they don't realize the bigger potential. I say this both as a newcomer and as someone who lives/works in SF Bay Area.

    0Reply
  • Account Closed
    Member since 2020 · 17 posts · 36 votes
    6y

    @Shane Austrie the OP wants to house hack and lower her rent payment. How does buying a house in Ohio achieve this?
    The majority of those who came on this thread to convince her to buy something out of state have something to sell her. That’s my issue 

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

     There is better cashflow in Ohio. If she buys a bunch of properties that cashflow then she can buy a house outright in California and have a $0 rent payment

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  • Sid Naik
    Real Estate Investor · San Ramon, CA · Member since 2014 · 67 posts · 28 votes
    6y

    @ 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 . 

    4Reply
  • Tonya Kelly
    Bay Area · Member since 2019 · 29 posts · 10 votes
    6y

    @Mary Griffin

    Good Evening Mary,

    Congratulations on your new goal.

    If, are planning on living in one of the units. I say purchase in the Bay Area. Due to if this is your first home you can qualify for first time home buyers and purchase up to a four plex with only 3.5 percent down. Also this is an opportunity to learn about property management.

    A con about purchasing In Oakland is the renter laws are not landlord friendly. Research the laws.

    Buying a property in another market without planning on moving there requires 20 percent down as an investor. If you have the funds go for it. Some markets have great cash flow.

    I wish you the best and let us know when you purchase your first property.

    2Reply
  • Will Dixon
    Accountant · Corte Madera, CA · Member since 2018 · 73 posts · 88 votes
    6y

    @Remington Lyman

    Since we're talking FHA purchases for sub $1 million, can you direct me to the Columbus investment that's going to net $3k a month off of a $50k investment? You have my attention.

    6Reply
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