@Nicole Chang I have units in North Oakland and the Fruitvale areas.
Making cash flow and appreciation in Oakland is 100% possible. @Account Closed is definitely blowing things up in his niche. Making money in the Bay Area is about focus and creativity. A deal to one person might not be a deal to another, especially in this market. You can even find 1% deals, if you look hard enough. They might not be 1% at purchase but with a good plan you can get them there in a short time. @Ori Skloot had a great post about a 2% deal he did in Richmond.
The main issue is that this is not an easy place to invest, but it can be done. It is not as easy as finding an agent, buying a place and making cash flow like some OOS markets. There has to be some serious analysis at every point to make reasonable cash flow and target appreciation. But if you can come up with a game plan and execute, you will be see very good ROI.
My property in Fruitvale is probably a good example for you. It is a 6 plex within walking distance of BART. Purchase price was South of $690k and my rent is north of $6k. It is not exactly 1%, it is .9%. In this specific case, the property was 100% financed through a HELOC. It was purchased in 2016 and I have already refinanced out and put my money back in my HELOC. My ROI is infinite... My CAP ex to date has been less then a few hundred dollars.
All of my tenants are still original. Once I get some turnover, the increase in value and cash flow will be tremendous. I have not made any efforts as to cash for keys or serious improvements because I am a small operator that does his own work. I just don't have the time to push this property while I am working on others, but I am happy with the flow and appreciation as is... for now.
Finding multifamily that cash flows in the bay area is very difficult. I grew up in the bay area and it was impossible for me to find anything that made sense numbers wise.
@Antoine Martel I’ve thought about out of state but it seems complicated especially if I don’t know the area and can’t look at a property myself or manage it in person
@Antoine Martel I’ve thought about out of state but it seems complicated especially if I don’t know the area and can’t look at a property myself or manage it in person
I was very scared at the beginning as well. But by doing your homework on local markets out of state you can really make some great cash flow. You can also hire a property management company to manage your property out of state.
@Nicole Chang: I'm going to provide a counter argument to turnkey out of state investing.
I'm not a fan of investing in small properties located in areas that are not familiar with unknown managers. The biggest determining factor of a profitable investment is a competent manager. It's hard to find good managers for small properties as the barrier to market entry for said managers is very low. Couple that with limited market knowledge, and you could find yourself in trouble.
Folks are finding deals in the bay area. Richmond and East Oakland provide opportunities for investors who have an appetite for low-income, high crime areas. The first in Santa Rosa have created an increasingly large housing shortage, providing opportunity to developers.
If you have an appetite for large multifamily (80+ units), the conversation changes.
I agree with @Tyler Kastelberg assessment. OOS is great for investors who can scale quickly to fifteen/ twenty SFRS otherwise earning $200 to $300 a door is not meaningful
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
@Nicole Chang
It’s easy to feel left out with all this OOS hype, but it sounds like you’ve already got an idea of what you’d like to pursue here in the Bay Area, I wouldn‘t get distracted.
I house hack in Oakland in a decent neighborhood that breaks even while I’m there and cashflows well when I move into the next one.
You can get primary residence financing, cashflow, appreciation, and not to mention OOS can’t touch the principle pay down you get here in the bay.
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
And how much would a 20 unit apartment building go for in Oakland? $5M? So then I would have to put $1.25M down for just 10k a month?
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
And how much would a 20 unit apartment building go for in Oakland? $5M? So then I would have to put $1.25M down for just 10k a month?
Far less, but even if that was the case, you wouldn't be ok with 10% COC and 30% yearly appreciation over the last 5 years?
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
And how much would a 20 unit apartment building go for in Oakland? $5M? So then I would have to put $1.25M down for just 10k a month?
Far less, but even if that was the case, you wouldn't be ok with 10% COC and 30% yearly appreciation over the last 5 years?
Absolutely not
(Because I'm about 1.25 mil short of the 1.25 down)
@kell caro @saj shah i have mainly been keeping my search to west oakland, north oakland, fruitvale or chinatown. There are a few options but i do not want to be in a neighborhood that is not on the upturn. I know oakland is changing, but some areas more than others, sometimes block by block. My main concern is how to truly spot a deal. I know the bay area fairly well as i grew up there but less confident about the financials side since I'm new to multi unit investing.
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
And how much would a 20 unit apartment building go for in Oakland? $5M? So then I would have to put $1.25M down for just 10k a month?
Far less, but even if that was the case, you wouldn't be ok with 10% COC and 30% yearly appreciation over the last 5 years?
Absolutely not
(Because I'm about 1.25 mil short of the 1.25 down)
Aren’t we all? I started with a $350K 4plex in 2014. $12k down, and just then just kept buying good properties. People act like the barrier to entry in the Bay Area is monumental. It just takes a little creativity.
It’s easy to feel left out with all this OOS hype, but it sounds like you’ve already got an idea of what you’d like to pursue here in the Bay Area, I wouldn‘t get distracted.
I house hack in Oakland in a decent neighborhood that breaks even while I’m there and cashflows well when I move into the next one.
You can get primary residence financing, cashflow, appreciation, and not to mention OOS can’t touch the principle pay down you get here in the bay.
@Antoine Martel
Nothing is imposssible my friend. I see your goal is $10K/month passive. You can achieve this in Oakland with 20 units, and get the appreciation as well.
And how much would a 20 unit apartment building go for in Oakland? $5M? So then I would have to put $1.25M down for just 10k a month?
Far less, but even if that was the case, you wouldn't be ok with 10% COC and 30% yearly appreciation over the last 5 years?
Absolutely not
(Because I'm about 1.25 mil short of the 1.25 down)
Aren’t we all? I started with a $350K 4plex in 2014. $12k down, and just then just kept buying good properties. People act like the barrier to entry in the Bay Area is monumental. It just takes a little creativity.
Are you spending a lot of time in the streets? I really believe your time would be well invested getting a thorough feel for different neighborhoods. It’s block by block for sure but I like to think of it as pockets. Just as an example, West Oakland is great for its proximity, but even within it there are less desirable areas to be in.
I don’t quite know how to spot the neighborhood that’s heading for an upturn, but it’s pretty easy to get a feel for a neighborhood that isn’t. Spend some time out there, cruise a list of houses as often as you can, and just sit in these different pockets until you get a good feel for what you’re looking for.
I’ll DM you my neighborhood and some places I like though if you’re interested
@Saj Shah
How did you finance the next 3-4 properties after your first? Did you have 20% down for each of the next ones?
Did you pull equity? I'm stuck saving for down payment number 2 at the moment.
How did you finance the next 3-4 properties after your first? Did you have 20% down for each of the next ones?
Did you pull equity? I'm stuck saving for down payment number 2 at the moment.
A little bit of everything: refi’ing, private money, friends and family loans for down payments, seller financing, SBA loan, HELOCs, business LOCs, and most recently, cashing out the 401K for a grand slam deal.
I also did not buy a primary SFR until I had more than 20 units.
If you end up targeting the Cleveland area give The Ultimate Guide to Grading Cleveland Neighborhoods a read. Lots of decent areas with some pretty atrocious areas sprinkled in. When investing out of state it's definitely buyer beware.
If you end up targeting the Cleveland area give The Ultimate Guide to Grading Cleveland Neighborhoods a read. Lots of decent areas with some pretty atrocious areas sprinkled in. When investing out of state it's definitely buyer beware.