@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.
@Kell Caro yeah I agree with you, walking the neighborhoods are the best way to get a feel for what’s on the upturn. Feel free to DM me your local suggestions if you are comfortable. I grew up in Alameda so know some areas of Oakland pretty well but others not as much. It’s definitely changing now with all the new development downtown.
@Nicole Chang I'm from the Bay Area (San Jose) and now live in Austin, TX. Haha...never thought I would move to Texas. Anyway, loving Austin so far. My husband and I have been investing in Dallas, Austin and College Station for the past 7 years. Been in Austin for 2 years after a 5 year expat adventure in Shanghai with our 2 children. I'm now taking over the Property management of our 6 properties and have been doing a lot of research in Austin and College Station. We decided to sell out of Dallas and focus on College Station/Bryan area because of growth. I would research Bryan, TX. The city that is next to College Station and the home of Texas A&M. They are building a second campus in Bryan and adding 25K students with a brand new community college. Its a booming city! I have a lot of data to back it up. ~Sonja Kapavik
@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?
I would not.
Appreciation doenst put any cash into my pocket unless I sell. I prefer to buy and hold so then I would look at the cash flow and 10% cash flow isnt great.
Also - this is assuming I have $1.25M of cash in the bank and have a net worth of $5M which I do not have.
@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.
@Arlen Chou really well said, I have heard that areas like Fruitvale and Richmond are seeing a big change so that all makes sense. Really appreciate your insight!
I just read your 2 years ago post and I am curious where you ended up to buying property at that time. I am looking for multifamily property in bay area and narrowing down area. I would like to get some tips by your experience.
@Judy L. Depends on what part of the Bay Area you are interested in. There are literally more multifamily properties available in Oakland, then all of San Jose and Santa Clara combined.