2% Rule IS possible in SF Bay Area!

61 Replies

@Ori Skloot great job man. I m really impressed how you leverage all your work . Also the lessons those kids are gonna learn will be so valuable in their future. Just had a quick question. How do you find the contact info of the owners of the house if it is abandoned ? Thank you

@Sean OToole cage homes, coffin homes and capsules....that's frightening to me.  I hope our area doesn't go down that road.  I would like to see more policies supporting small and micro homes.

@Randy Gleysteen   Cabinets and the quartz counter top are from Granite Expo.

@Arpan Gurung There are lots of online services that allow you to input an address and find the owner and contact info.  Do a search here on BP and you will find many recommendations. 

@Yoav K. Good to hear from you....I thought you dropped off the face of the earth, or perhaps went back to Israel. 

  

You could have bought a C quad OOS and had more cash flow, oh well. I am kidding, the thing about the initial 2% is in places like Bay area it actually is a serious accomplishment. Congrats.  

Now 2% or 1% peeps might understand these are initial starting points, and many times .7% futures will end up 3%+. Sometimes more important than the initial % is the direction up or down and why these initial percentages are not reliable indicators of future profits or taught in formal university settings, nor found in any textbooks etc. What they might cover instead is spatial relationships (location). 

Good luck!

Originally posted by @Sean OToole :

Congrats @Ori Skloot ! Amazes me how many people pass deals down the street for stuff across the country.

While the prices may seem crazy to those elsewhere, I think cage homes (yep that's a thing) will be part of the story by the peak of the next cycle in Bay Area. Check out: https://www.facebook.com/Vox/videos/18316085836022.... A friend's kid working in tech is renting a master bedroom CLOSET (walk in) in SF for $900/mo. In the right location you could probably rent the nice cages shown in that story already. Having visited Hong Kong, it opened my eyes to where we may be headed. Makes SF today feel quaint, and relatively cheap.

 https://sf.curbed.com/2017/3/30/15127760/homeshare-startup-partition-luxury-apartments-sf

Ori - First of all, great job. Also living in the Bay Area myself, you are surrounded by sharks - very experienced investors etc. that know how to take foreclosed properties and find other deals to quickly turn them around. I would say you definitely did hard work but there was a little luck involved. Very difficult to get deals like this in the Bay Area - especially on the Peninsula. Glad you had success - Out of the 100 was this the only one that seemed like you could make it work?

I gotta LOL a bit at the kitchen. That's some of the same stuff I use.  Looks like my home depot white shaker cabinets and same SS appliances.  Can't tell by the countertop but I use a lot of white quartz so it looks very similar :)

Well done!

You did what most people don't.  You got on the phone (or had someone) and really worked those leads.  Most people just blast out 100000000 postcards (I got 6 of them today!).  Those end up in the trash which makes people think finding a property is 'too hard'. 

Congrats on showing how it's done.

Great deal! I imagine though you're actually paying more than $390/ Mo on insurance, taxes and HOA fees. Are you assuming holding no reserves for maintenance or capex since you just refurbished everything? Either way, still pretty great numbers, but I'm curious about taxes, insurance and HOA.

Charlene

Nice job!

Why did you decide to go all cash?  

Any reason why you didn't want to save some of it for another property to expand faster?  

What was your reasoning behind this? 

@Charlene McNamara

"I imagine though you're actually paying more than $390/ Mo"

Valid point, no rental on the planet has expenses that low long term. Probably closer to 40%....$996

Couple of other minor calculation mistakes.

2% rule.. gross rent $2490 / $350,000 = .7%

ROI ($1494 X 12) / $350,000 = 5.1%

Hi, I'm new to this, so I don't understand some of the numbers here. You said that you hired  a probate lawyer. How much did that cost you and where is the cost included; in the $95k? Also, the family paid the $50k in back property taxes. Why would they be willing to do that and where did they get the money, since it doesn't look like they could afford it? In any case, nice job and congratulations.

@Ori Skloot I work in Richmond and know this market. If you are willing to make investments in the iron triangle, good for you. This is a D (F if your scale goes there) area. There is always money to be made in war zones, but let’s be clear to everyone that this is the epitome of a war zone.
Originally posted by @Glenn Sullivan :

How did you access the phone number for the owners of the homes you targeted?

 While Ori was searching the probate file he came across the court-mandated document Duties and Liabilities. This document displays the PR's name, address, city, state, zip code and phone number. One of his nephews more than likely cold called the PR.

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