Best Northern California/Bay Area Cities to Flip?

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Best Northern California/Bay Area Cities to Flip?

Stephanie Chiramberro
Realtor · San Francisco, CA · Member since 2017 · 30 posts · 15 votes

Where have you found the best profit margins when flipping for under $600k within a few hours driving distance from the Bay Area? 

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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
6y

I’d say East Oakland, and you don’t even have to drive a few hours.

We flipped 2425 Harrington Ave a few months ago. I forgot the reason we passed on 2574 63Rd Ave, but Juan Diaz should do well with this flip as it has unaccounted square footage on the lower level where he can legalize it.

My partner has 1021 83rd Ave on the market. I think he should do well with it. Hard money is cheap now at 8% with less than 1 point. The entry level market is still hot. Don’t go too far from the Bay. Stuff outside the Bay Area is cheap for a reason, and their markets are not as robust as ours.

Happy hunting.

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  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y

    I’d say East Oakland, and you don’t even have to drive a few hours.

    We flipped 2425 Harrington Ave a few months ago. I forgot the reason we passed on 2574 63Rd Ave, but Juan Diaz should do well with this flip as it has unaccounted square footage on the lower level where he can legalize it.

    My partner has 1021 83rd Ave on the market. I think he should do well with it. Hard money is cheap now at 8% with less than 1 point. The entry level market is still hot. Don’t go too far from the Bay. Stuff outside the Bay Area is cheap for a reason, and their markets are not as robust as ours.

    Happy hunting.

    8Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Account Closed Glad to hear you're getting a great rate!  Sub 8% even on short term, 12 month notes is definitely out there for experienced borrowers but where are you getting that for less than 1 point?  Is it 90% leverage?

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  • Raju BalakrishnanPro Member
    Rental Property Investor · Santa Clara, CA · Member since 2016 · 223 posts · 112 votes
    6y

    San Jose current market will have some deals on the range also. 

    1Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y
    Originally posted by @Alex Bekeza:

    @Account Closed Glad to hear you're getting a great rate!  Sub 8% even on short term, 12 month notes is definitely out there for experienced borrowers but where are you getting that for less than 1 point?  Is it 90% leverage?

    Hi Alex,

    Not sure if I can disclose the name of the lender, but this lender hosts a monthly meet-up here locally, and I have seen them at several other meet-ups in the Bay Area each month too. This lender also has the present on BP. 

    0.75 pt at 7.99% with 85% LTC to be exact with a 12-month term. 90% rehab loan is also offered although I haven’t borrowed rehab loan from them yet. 

    A local flipping friend, who also borrows from this same lender, told me he’s borrowing from them at 90% LTC with the same terms. He does more volume and higher prices. He told me I need to push for 90% LTC, but I haven’t had the need to do it yet as I’m quite happy with the person I’m dealing with.  

    I believe my partner borrows from another lender at 8.5% with 1pt at 90% LTC plus 100% rehab loan up to 75% of ARV. All in all, they're quite competitive.

    3Reply
  • DG A.
    San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
    6y

    Hey Minh,

    how did you do on that flip? What were your numbers?  2425 Harrington Ave is literally 4 blocks from where I live.

    3Reply
  • Jerry Chan
    San Leandro, CA · Member since 2017 · 6 posts · 3 votes
    6y

    Hey @Account Closed, I live in the bay area and have always had interest in flipping homes in the bay area but never had the confidence to actually execute. Hopefully I can make a move some time soon.

    Just curious, how are you finding your deals? Are you finding them on MLS?

    Any information is very much appreciated. Thank you!

    1Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y

    @DG A.,

    We did alright. Cleared $102.5k after all costs and also set aside a few thousands for the supplement property tax bills.

    @Jerry Chan, no seller is going to hand any money to you. You either have to manufacture it or earn it somehow. Real estate in the Bay is an ultra competitive sport. Individuals, who are willing to dedicate and put in the efforts, are getting handsomely rewarded.

    As Master Yoda said “Either you do or you do not. There’s no try.” 😁

    Kidding aside, we have found deals on both the MLS and off-market. Once you KNOW YOUR MARKET WELL, you can spot a deal from miles away.

    If flipping interests you and any others, I suggest you guys attend a couple of meet-ups hosting by either Juan Diaz or Jeff Pollack. 

    Ironically, flipping doesn’t interest me. The reason I do it is to help out a friend and make some extra income to buy toys like the new Cybertruck tri motor. Reservation number RN112782630. 😁 For me, I make my money with multi-family in San Jose with a lot less efforts. Once you’ve established a relationship with the agents/brokers in your market and known to be a closer, the deals will come to you. The business is on autopilot. Seriously.

    Best of luck.

    6Reply
  • Jerry Chan
    San Leandro, CA · Member since 2017 · 6 posts · 3 votes
    6y

    Hi Minh,

    Not much of a Star Wars fan, but definitely a good quote to live by. 

    I am definitely ready to invest. I guess I don't have a clear direction of where I want to go. I was actually interested in investing OOS in fast growing cities with good rental income and in hopes of appreciation as well, but then I see people like you making 6 figures in the bay area from a single flip and I just wonder if I should be taking advantage what I can do here. I guess I'll need to figure that out before "I do".


    Thanks for the information! I'll be sure to look up when the next meet-up is!

    2Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    I think people are doing lots of flips in Stockton as well as Oakland.

    0Reply
  • Stephanie Chiramberro
    OP
    Realtor · San Francisco, CA · Member since 2017 · 30 posts · 15 votes
    6y

    @Account Closed I've driven by homes in Oakland and anything west of 580 didn't seem like great neighborhoods. Does that not matter? People are willing to buy in those neighborhoods if the homes are rehabbed? Do you have any areas you avoid altogether in Oakland? Or any you target?

    1Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y

    @Jerry Chan,

    Since you live in San Leandro, we flipped 15306 Dewey St earlier this year. Bought it off-market for $435k. Put in $50k to rehab and sold for $610k. Netted $70k profit after all expenses. It was a straight forward rehab. The garage was legally converted back in the days, but it was never officially recorded so we got it legalized without much issue.

    By the way, I’m not a fan of Star Wars either so don’t sweat it. In fact, I have never watched even one episode. That’s the only phrase I knew about Yoda. Someone on BP gave me the Yoda nickname, but when he met me at a local meet-up, he said I’m too tall to be Yoda. Since I love KungFu Panda, he gave me a new nickname Master Oogway. The local (veteran) investors have been calling me the latter name for years. I took it as a compliment. 

    @Stephanie Chiramberro, be careful of generalization like that. I guess you haven’t heard of Adams Point, Cleveland Heights, Maxwell Park and Millsmont to name a few. Some of these are million dollar neighborhoods. You need to know YOUR MARKET extremely well to have a shot competing against the local veterans who live and breathe this everyday.

    Take another flip for example. By your definition, it’s not a “good neighborhood”. My partner bought it for $375k and sold it for $715k this summer. Netted $147k profit after all expenses. Address is 3032 Fruitvale Ave. Just ponder on this for a moment and see if it’s “worth it” to dig deeper and get to know your desired market better to compete against the local veterans.

    Real estate flipping/investing is definitely not easy as it looks. Otherwise, everyone would be doing it. It’s reserved for the special few. The journey is challenging, but it’s really rewarding. We have a chance to build multi-generational wealth that everyone is dreaming off. It offers financial freedom and the ability to do whatever we want. What the hell are we going to do with OOS assets that don’t appreciate or even depreciate over time? Where is the wealth building in that? 

    Happy Thanksgiving!

    6Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y

    @Account Closed  got my Cybertruck resi in as well..  LOL..  

    flipping works in Every market.. SF bay area is just one of the very high dollar markets.. 

    And its a great time in the Bay Area to borrow HM  its a race to the bottom on rates and points.

    I mean my full doc commercial bank loans for new construction are 6.5 to 7 % apr.. so not a huge difference going private HM

    Even though % margins are smaller on some of the deals you talk about in the Bay area the actual DOLLARS for time invested is very good.. who would not like to put a 100k check into your account for a flip a flip is a flip is a flip.. ???

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    6Reply
  • Jeff Pollack
    Real Estate Investor · Redwood City, CA · Member since 2012 · 272 posts · 399 votes
    6y

    @Account Closed obviously it has been too long since we spoke. I had no idea you were flipping these days. Though the last time we did lunch a while back you did say you were considering flipping in the East Bay. Also, I stopped running my Meetup a year ago.

    Happy hunting, and have a very Happy Thanksgiving!

    Jeff

    4Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    6y
    Originally posted by @Stephanie Chiramberro:

    Where have you found the best profit margins when flipping for under $600k within a few hours driving distance from the Bay Area? 

    Flipping isn't dependent on the market. It has everything to do with you and your skill set. To pull one of those deals off you need to be able to find distressed seller's who are willing to sell their property below market. This requires

    • An in depth knowledge of the market.
    • Marketing skills.
    • Sales skills.
    • Negotiation skills.

    From there you need to be able to

    • Accurately estimate rehab costs.
    • Accurately estimate after repair costs.
    • Understand how to manage a renovation budget and timeline.
    3Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y

    @Jay Hinrichs,

    HMLing is just a straight up higher yield play to me. The race to the bottom is the right term as there's so much money sloshing around looking for yield. Some HMLs are getting really aggressive, which is scary to me. I'm hunkering down on this type of play as I don't know when the market will take a turn. I'd rather stick with my bread and butter, slow and steady, value-add multifamily acquisitions. With low in-place rents, the notice of rent increase keeps coming even the downturn is here so we're still getting raises in a recession.

    With respect to profit margins, the market has been carrying us. The same could be said with multifamily investing. We got lucky that we've been able to ride the wave rather than sitting on the sidelines and watching. We have to play to get lucky. Otherwise, it's just wishful thinking. 

    @Jeff Pollack, I guess you're making too much money with flips that running a meet-up is no longer the best use of your time? Kidding aside, I didn't realize it has been that long. Some update for you. Last year, we added 22 doors to our portfolio ( 2 bldgs). This year, we added 9 more doors to our portfolio (a 4-plex and a 5-unit). We're currently going through entitlement to build 7 additional units on the oversized lot of the 4plex in Oakland. We may sell the 4-plex with the 7-unit entitlement when done rather than building it. Paid $720k for it so it was a cheap introductory to learning about entitlement and possibly new construction. If we don't get the price we want, we'll just sit back, collect the cash flow, potentially develop it, then do a cash out refi and get our money out of the deal. Rinse and repeat, and scale up the biz with this biz model.

    @James Wise, very wise words sir. Everyone sees flippers making six figures on each flip and thinks easy money. For each flip to be successful, it does require a well-rounded set of skills that you outlined above. Thanks for your short and precise valuable contribution.

    2Reply
  • Polly Bradbury
    Member since 2019 · 2 posts · 1 vote
    6y

    I have been doing flips in Concord for a couple of years now and am planning on moving into income properties. I'm new to Bigger Pockets and would like to start networking, going to meet ups, getting connected with potential partners, etc. 

    I have been educating myself with the help of BP and books, love to compare notes, strategies, etc

    1Reply
  • Alvin Uy
    Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
    6y
    Originally posted by @Account Closed:

    I’d say East Oakland, and you don’t even have to drive a few hours.

    We flipped 2425 Harrington Ave a few months ago. I forgot the reason we passed on 2574 63Rd Ave, but Juan Diaz should do well with this flip as it has unaccounted square footage on the lower level where he can legalize it.

    My partner has 1021 83rd Ave on the market. I think he should do well with it. Hard money is cheap now at 8% with less than 1 point. The entry level market is still hot. Don’t go too far from the Bay. Stuff outside the Bay Area is cheap for a reason, and their markets are not as robust as ours.

    Happy hunting.

    I'm closing on a 4day escrow at 8% zero points... 80/100% rehab. I get this same rate up to 90% LTV.

    1Reply
  • Alvin Uy
    Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
    6y
    Originally posted by @James Wise:
    Originally posted by @Stephanie Chiramberro:

    Where have you found the best profit margins when flipping for under $600k within a few hours driving distance from the Bay Area? 

    Flipping isn't dependent on the market. It has everything to do with you and your skill set. To pull one of those deals off you need to be able to find distressed seller's who are willing to sell their property below market. This requires

    • An in depth knowledge of the market.
    • Marketing skills.
    • Sales skills.
    • Negotiation skills.

    From there you need to be able to

    • Accurately estimate rehab costs.
    • Accurately estimate after repair costs.
    • Understand how to manage a renovation budget and timeline.

    I think you forgot to mention a couple of very very important thing:

    –––> The Financial Bandwidth (or Access to funds) to close fast!

    0Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    6y

    Stephanie,

    I asked you to go and check out this flip while we were working on it a few months ago. Not sure if you had a chance to. Anyways, we did well with it. It was an MLS deal, and it was on the market forever too.

    @Jerry Chan, we borrowed 85% LTV + 100% rehab loan from Lending Home on this flip. Just be creative in your thinking. It's possible

    https://www.redfin.com/CA/Oakl...

    We made a run on a fixer-upper in Castro Valley recently. It was listed at $400k.

    @DG A., Juan Diaz got it at $625k. I hope he’ll do well. Too aggressive of a pricing for us to chase. 

    However, we’re in contract on another house. We’ll share when done if anyone is interested. 

    4Reply
  • Sam Swillinger
    New to Real Estate · San Francisco · Member since 2022 · 1 post · 1 vote
    4y

    Hi all, considering this was posted two years ago (before the pandemic) would you still recommend flipping in the east bay area? 

    I'm exploring Vallejo, east Contra Costa, and east Alameda county. Do you think people are moving into those areas?

    This will be my first flip and I'd like to live in the property and commute to my day job in SF a few days a week. Any advice at all would be immensely appreciated, thanks!

    1Reply
  • Logan Jennings
    Member since 2021 · 1 post · 1 vote
    4y
    Quote from @Sam Swillinger:

    Hi all, considering this was posted two years ago (before the pandemic) would you still recommend flipping in the east bay area? 

    I'm exploring Vallejo, east Contra Costa, and east Alameda county. Do you think people are moving into those areas?

    This will be my first flip and I'd like to live in the property and commute to my day job in SF a few days a week. Any advice at all would be immensely appreciated, thanks!


    Sam, I also have very similar questions regarding house flipping in the bay area. Glad there are other young professionals here in the Bay area who I can bounce ideas off of. I believe you have my contact information, please reach out if you would like to meet up and connect. 

    Cheers!

    1Reply
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