House hack a multifamily in the San Francisco bay area?

6 Replies

My Husband and I are struggling to decide the best course of action and are hoping the BP community could weigh in with their advice...

We live in San Francisco and currently pay $2,500 a month for a studio apt and have a baby on the way (very soon). We realize that the market is high right now but it also seems to make sense in our lives to buy now. Initially we planned to invest in some SFR in Florida but have been considering the advantages of house hacking a multi-family here in the bay area, probably Oakland. I am very interested in this option but I also have reservations because of the large singular investment. I have tried to get as much information as possible to understand at what point the market is in but i'm getting everything from "Danger- SF bay area is on the brink of the next tech bubble crash" to "Safe- because of the amount of capitol available in the bay area the market is really only overvalued by 10% as opposed to a real bubble market which is overvalued much higher"

I see that the multi-families available are definitely retail post flip prices, especially in the areas I would consider living in with a baby and many of those have rent controlled tenants.

I'm trying to think creatively about moving forward weighing our $30,000 annual rent bill against potentially having a $600,000-$800,000 mortgage in a single 4 plex where it seems to make sense financial now but I'm concerned about market crash or unforeseen event.

I guess my question is what would you do, invest elsewhere and stay put with high rent or dive into a bay area house hack? Am I missing some thought process or option that is right in front of me? 

I really appreciate anyone's input!



I'm no expert, so this is only my humble opinion. Experts can weigh in. I'm familiar with the Bay area as I lived in Livermore, Pleasanton, and my Father worked, as so did I for a few days, in SF. I also was checking out properties in the San Jose, Oakland, SF, Walnut Creek, etc all around the Bay Area. Also, as a storage unit warrior at the time. So, that's my credentials to weigh in.

I'd always keep an eye open in your local market, first. Watch for "signs" of economic change (job losses, tech business news, increasing crime, rents and housing prices, etc). Although Oakland can be better priced, it doesn't mean it's the best move (pun intended). If you know the area of Oakland, it can be just as much as the middle market in SF. You might get more land, rather than an apartment/condo for the same price. However, dealing with Oakland Bay Bridge commute everyday is a consideration as opposed to living in SF. Though, traffic sucks either way.

You still have time as the baby can bunk with you in the cradle for now. 6 months down the road (from birth), it may be time to kick the child out to their own space. So, you still have time to view the scene. keep reviewing the market prices in the areas you currently live and want to move to, but always go with what is currently happening. If you base your move on futures, it may not happen as you expect and may end up regretting your decision.

Also keep an eye out to take advantage (move quickly) on deals that fit your criteria. For example, you could buy a duplex with one side needing repairs, but the other livable. You do quick fix on your side, if needed, to start residing. Then, as quick as you can, rehab the other side to start getting that renter in-place. Hopefully, their rent could pay your mortgage costs. Ideally, it would give you some cashflow. Save for repairs and vacancy for your rental side, just in case.

Hi Carole -

Congratulations on your upcoming arrival :) !

I would not do anything at the immediate moment if I were you. I would sit tight and focus on baby stuff. The reason I say this is, as a mother myself, it will turn your life upside down for a few months. Don't put too much on yourself at the same time. Maybe you are a real go-getter but it would have done me in, personally speaking.

However, I am also a newbie investor, over in Oakland, and so I don't know much, although I do own property. My feeling is that now is a GREAT time to focus on location - where do you want to invest in? What locations are you comfortable putting your hard earned cash into? Where are locations people will want to live in and why? What kinds of properties are they looking for?  My brother flips in Pac Heights in SF and the people who buys his properties are in tech. He has narrowed in on his target market and knows where they are looking and what they are looking for. Then he just provides them the product, and he is doing quite nicely.

Then I would focus on finding deals and finding a realtor who works with investors who knows those areas. A deal will happen along - I think they exist in every market - and you will be ready and know what you are looking for.

I hope you keep us posted on your journey!

All the best,


I lived in SF for 4 years...left my heart there!  I was a student at the time and I was impressed by all the rentals available near UCSF, UOP, SF State, USF, et cetera.  There were some lovely duplexes, 4 plexes, apartment buildings, whatever.

If you keep an eye open for such while you're pondering your next move, something like that may open up for sale.  I think you have to be patient and take the time to research.

Hi Carole,

Congrats on the little one to come! I have no experience with your area but wanted to share my thoughts based on my story as it seems a bit similar to yours. My wife and I currently live in a 4 plex and rent the other 3 units. That was our first investment. It is in a desirable location and we even have plans to buy a single family home in the same neighborhood in the future. My wife and I also just had a baby girl who is now 5 months. Being that the units in our building are all 1br 1ba 800sqft, it is a bit tight but not terrible.

We love the situations because the building still cashflows well as we live for free. It enabled us to stop paying rent month after month and build some equity in a building while producing extra cash every month.

I understand having a newborn is a big change with a lot on your plate right away, but if you and your husband are planning on doing this together, you can definitely make it happen. It really is easier then it seems. Especially with all the resources here on BP. I completely encourage you to look into house hacking a multifamily.

Like I said, I am not familiar with your area and market but as long as the numbers work and you can live for free or close to it, I would jump right in! We are very glad we did and if you have any other questions for me please reach out and I am more then happy to help you further as much as I can.

@Carole Dockree congrats on the upcoming baby! 

Heads up... San Francisco has very very tenant friendly laws. I only know this because I used to live there and was able to get my full deposit back every single time. Did you know that if there's any shred of proof that the landlord is holding on to a deposit in a "wrongful" way that they owe you 3x the deposit? (there's a great tenant's rights area that provides info ). Plus small claims court up to $7500. This means that it's easier for tenants to represent themselves without a lawyer. 

It's worth checking out the specifics re: tenant laws in Oakland prior to purchase. 

it might also be worthwhile to run the numbers on a few deals to let BPers weigh in - also there are some peeps who seem to have done well in Oakland. At the end of the day, Bay Area real estate is like no other. You'll want local advice!

I do believe that there are deals to be found in any market but a lot of it will depend on capital. A "deal" in the bay area may still be 10x more than anywhere else in the country (I made up that number but you get where I'm coming from...).

Hi, I used to live in Noe Valley, and we moved to Oakland ~3 years ago after having our second child. As for the commute, it really depends on where you work in SF and where you live in Oakland. There are transbay bus lines that will take you directly to SF and back in addition to BART. I worked on Market Street and my commute was shorter than many of my co-workers who actually lived in SF. I also have an electric vehicle and can skip traffic using the HOV lanes although I mostly used BART or the bus.

$600k-$800k may not be enough to get a place that is assigned to one of the top elementary schools. Oh, and you don't have to deal with the crazy SF school lottery system. If you live in a neighborhood with a good school, that is where your kid will go.

Hard to predict the market and it can't keep going like this forever, but I'm in tech and the venture capital investors I know don't think there will be a crash. A pull back, but not anything catastrophic. At least there are no signs of that right now. Many of the firms have just raised new funds, so they have lots of dry powder which they'll focus on their existing companies first, to ensure they are healthy and well capitalized. The hedge funds have pulled out, so they'll be some drama at the high end of the market, but the bread and butter venture firms seem to be in good shape.

This advice and $2 will buy you a cup of coffee


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