New member in SF Bay Area

9 Replies

Hi BP,

I'm Tracy and I fell into real estate development a few years ago when I couldn't find a house I wanted to buy.

I did, however find an empty half acre lot in wine country, in a great neighborhood. It was zoned light commercial, but after going through a long process with the county, I was allowed to build on it using a use permit, and keep the light commercial zoning. After another interesting process with a construction mortgage and then rolling it over into a traditional mortgage, I now have a passive solar, LEED gold compliant house that I meant to live in for the next 50 years...

But life happens, and to be closer to family (and also minimize my commute to my day job in biotech) I think I am going to put my current house on the market and look for a multifamily property closer to Albany/Berkeley or on the peninsula. This time I am not looking to do new construction from the ground up!

I've been listening to the podcasts for a while and am looking forward to meeting more people in the community and learning even more.

If you have advice/tips on commercial real estate/investors in wine country, or MF investments in the east bay, I'm all ears!

Thanks,
Tracy

@Tracy P. Welcome to BP!
Congratulations on getting through all of the red tape and building your home. Perseverance will come in handy on your journey.

You should come to this meetup in Berkeley and get to know the local investors in person.

@Tracy P. ,

Welcome to the forums after checking out the podcasts! You're in the right place :) 

I own some property in the East Bay and have furnished rentals up and down the peninsula, SF, and East Bay also.  Quit my job last year (no commute!) and just travel around the world while running my business (officially, have my place in SF.)

Congrats on going through the fire, building your first place. That's a lot of stuff to deal with!! Curious.. are you planning on living in the multifamily you're talking about purchasing? 5+ units? Or more typical 2-4 unit residential? 

Also, do you know what the highest, best use of your Sonoma property is, given its current zoning, user permit, and existing improvements? Is that why you're asking about a commercial real estate/investor in wine country? Might end up as a development deal? (if not for future development, you'd just be looking for a residential agent, right..?) (These questions should help us get you some good contacts)

Hopefully someone will pay up for the LEED Gold, but sometimes homeowners spend more on their "forever" home than may be justified by a pure investor-builder trying to maximize profit. Hopefully timing was on your side also, and added value through the construction price on the home.

I agree, the podcasts are awesome! A bunch of the interviewees will be coming out to Oakland in Oct if you can make it. (check signature) Lots of great networking in the Bay also. That's how I got to my goal in real estate, so I highly encourage everyone to get out there and meet people in person. 

I agree with @Account Closed 's meetup in Berkeley. I'd be out there if I weren't up in Seattle for the summer! Looking forward to meeting you in person when I get back and hear some about your home build. Sounds like there might be some interesting stories there!

Hi @J. Martin ,

Thanks for the warm welcome, and the wealth of info!

Congrats on your newfound freedom! That's an impressive, and inspirational track record you have. I'd like to be even a fraction of the way there in 10 years, so am looking forward to learning more from the trailblazers out there. The Bay Area is definitely a unique market, but it's home so I figure I'll try my hand here first.

For the multifamily, yes, I would plan on living in one unit. But I'm definitely leaning heavily towards renting for a while while doing my diligence.

On my Sonoma property, highest and best use would be something light commercial like a tasting room. I actually designed it for entertaining with a double-height great room and mezzanine that looks over into the main space; there is also an art studio with separate entrance that could easily be a 1-bd. I haven't explored condo conversions or anything like that as it involves a more sophisticated market understanding that I don't have yet. There is also half the parcel left that could be buildable with a retaining wall, but I didn't want or need that space for my SFR. It would actually be much easier if I didn't live there since removing the use permit (which is very easy) makes the zoning the primary use determinant, and expands opportunities for all sorts of other things.

Glad you feel the same way about LEED Gold-- I have the checklist all signed off with the points calculated, but didn't think it was worth it to pay for full certification.

My sense is the easiest thing would be to market it as residential to a buyer who might want to live in it and then later make it commercial. But I'm willing to put in some work to validate assumptions before taking a big step, so here I am.

Hope your summer in Seattle is going well and look forward to meeting you and others at future meetups!

I have a work conference that overlaps with the Summit but will be looking into travel arrangements to see if I can make the tail end at least.

Cheers,
Tracy

@Tracy P.

Thanks for the kudos :) It's nice to be able to live the life I want in my early 30's. I thought it would take me a decade+, but really just took some sacrifices and pursuing what I really wanted (of course, it also meant abandoning my 9-5 career!)

For wine country.. 

I think @Adam Menconi is up in Santa Rosa, but believe he deals with some high-end stuff in the area, and may be able to help you out or point you in the right direction. @Bill Bockwoldt is up there and might have a good contact. Has done some conversion work on his property. You might also want to stop by Michael Morengello's Bay Area Wealth Builders (in Marin?). There are a lot more wine country folks out there. And also be sure to make it to the East Bay meetup. Whether or not you can make it to the Summit, be sure to get out there and meet investors in person! 

I would be cautious about getting rid of the use permit until you know what the market really wants. Unless it can be easily obtained later, getting it is the issue. You can always remove it, right? It would probably also be more valuable if you can find out what is legally buildable (height, footprint), what logistically works on the lot, and possibly even some ballpark quotes and contacts. Making the "vision"/dream as easy as possible for the retail/non-sophisticated buyer may really open some opportunities. You're not just selling your existing house. You're selling the dream ;)

I don't think I caught whether or not you were looking at a 2-4 unit, or 5+ units for the multifamily in the East Bay. Usually totally different agents dealing with 5+ (commercial) vs 2-4 units (residential). 

@J. Martin ,

I just found your 3,000th post saying that you've been doing this since 2011. That's even more incredible! And point taken about sacrificing to pursue what you want-- I've done that before ($$$ in student loans and years in grad school) and am willing to do that now.

Really appreciate the support. I will take a look at the Marin meetup too and get myself out there. Sounds like @Adam Menconi and @Bill Bockwoldt are great resources so I will do my prep work.

Re the use permit, you hit the nail on the head. Right now the property has the most mass-market appeal so I'm not touching anything. Removing it is absolutely much easier than getting it. Thanks for the guidance on building the "vision" for someone else too, I have pretty decent contacts in the architecture/building industry and can probably get some good feedback and estimates too.

For multifamily I initially thought about starting with residential as it would be my primary residence; however I am still educating myself on commercial multifamily and it is quite attractive from a financing and market stability perspective.

I'm also really liking the idea of finding an experienced partner or consortium to do deals with so that I can come up the learning curve with guidance.

The forum's a great resource and I can already tell I'll be spending a good portion of my time on here.

Hi @Tracy P. Welcome to BP. So nice to connect with you! Kudos to you on getting through all the red tape and making your lot work for you! Your House sounds beautiful! This Valley is Hot! I am seeing properties move just days after hitting the market. Between your Use Permit AND your current LEED gold house, you have some great value on your hands. I agree 100% with you on marketing it as residential with the possibility of making it commercial use later down the road. sounds like your property may be located somewhere just off the plaza or Is the house located where it can be permitted for vacation rentals? 


Hi @Chelsie Running,

Great to meet you too! Thanks for weighing in, that's helpful to hear.

I'm not in incorporated Sonoma and so there are a number of vacation rentals on my street too.

I did live right off the Plaza for a number of years though and you can't beat the location for walkability! I miss Tues night markets.

Hi @Tracy P. It sounds like you made a great investment with that property! I have some buyers actually looking to buy something on some land and build a couple small units and turn into a bed and breakfast. I was thinking of you as they were telling me this.

I live down on Broadway but my office is on the plaza. Really is a fantastic location! I love the convince of being so close to the plaza but I'm just out of town so I feel like I'm in the country.

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