New investor looking for MFR in the Bay Area

8 Replies

Hello!

I'm looking to get into MFR (4 units) investing, whether here in the Bay Area (preferred) or out of state. I'm hoping it would be in the Bay Area since I can rehab myself, but I don't believe I can find anything here that cashflows. What are your guy's thoughts on this?

Thanks!

@Wayne Brady there are many posts about this topic, but the summery is that cash flow does exit in the Bay Area.  Remember that cash flow is a function of how much you want to put down on the purchase.  It is also a function of the rents that you can generate from the property.  If you are thinking that you can do a 20% down with no strategy to increase rents, then you will never find a deal here.  But if you get creative, based upon your strengths, then cash flow and appreciation is 100% possible in this market.

Really going to come down to what your budget is and what kind of capital you have access to....

@Wayne Brady

We can certainly find something that will cashflow if you are in the mindset of rehabbing yourself. The key is add value within adding additional units, footage and rent increases when possible. I just sent you a quick message with my information, please reach out anytime! 

For most properties in the Bay Area you need to have 40% down to neutralize your cash flow, but the more expensive the property the worse the cash flow for most property. Also, a four plex at 1.5 million is rare. I would suggest looking south, in a place like Morgan Hill/San Martin/Gilroy where the prices are more reasonable and appreciation set to go up as more tech companies keep moving further south. Santa Cruz county is another great place to invest. The vacancy rate is 1.67% and CAP rates higher than in the Silicon Valley.

@Wayne Brady definitely out of state... I'm doing it for many years now and getting a very good result in TX.  If you are interested in MF investments (apartment complexes) feel free to pm me and I can share some information...

Hey Wayne, welcome to BP and am excited for your investing progress. I'm curious to know why you want to stay in the residential multifamily space and if you plan to live in the property yourself. With your budget, you could probably afford some of the multi-families in Berkeley, Oakland, Hayward, San Leandro, and the rare multifamily on the Peninsula.

With regard to your criteria for cash flow, as others mentioned, it can be impacted by your down payment percentage. Do you have an idea of how much cash flow you want and how much down payment you are willing to put? This is often referred to as the cash on cash percentage metric and different markets will have varying rates. It's up to you to decide how much return/risk you want from your cash investments.

If you're interested, I am currently involved in getting off market deals in the multi family space around your budget level, and can keep you posted on opportunities that we find. PM me if you're interested

There’s on in east oakland close to mills college that I have been eyeing on. 4 plex, don’t need much rehab and cash flows a little, but best if you can do owner move in.

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