First Timer in Oakland

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First Timer in Oakland

Michael Cornell
Oakland, CA · Member since 2017 · 5 posts · 0 votes

Hello BP,

Was looking for a bit on advice on my intro into real estate.

I am a 35, married with a baby living in Oakland, CA. I have no debt and enough money to make an initial investment in a property. I have a good paying job that I enjoy, so looking to invest while doing my full time job. Possibly working towards a more full time thing. I am currently renting.

I am interested in multi-family to buy and to live in Oakland.

I have 8 years experience as a carpenter in a previous life. I’m not going to be remodeling everything myself but thought its good to align my life experiences with my foray into entrepreneurship.

Couple of questions,

I am not loaded. I have enough money to scrape together a downpayment on a single property. Is investing in a single expensive market like Oakland make sense or would I over-expose myself? Should I look to invest elsewhere and continue to rent here?

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Kevin Dang
Specialist · Oakland, CA · Member since 2014 · 83 posts · 28 votes
8y

@Michael Cornell I second on that strategy. After that, you can do a 1031 exchange. 

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  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    8y

    @Michael Cornell how much rent are you paying? My advice would be to find a tri/quad plex and buy it with as little down as possible. If you buy it right your tenants should cover the mortgage and expenses.

    Since you’ll no longer have a rent expense, you can save that money monthly and build your savings again. In a few years you should be able to buy more property.

    1Reply
  • Michael Cornell
    OP
    Oakland, CA · Member since 2017 · 5 posts · 0 votes
    8y

    @Account Closed I am currently paying $2525 in rent. And that plan you are laying out is essentially what I'm thinking I should do. I just have a lot of knowledge to catch up on.  I want to buy right and have a solid investment, but realize that first investment will probably be a little bit like pioneering. Saj, I see you are from Oakland as well. Any tips or resources to help me take that jump? I am currently in soaking up information stage. Going through BP's 20 steps. The next step is starting to look at properties (just to get an idea of the area) and getting my team together.

    0Reply
  • Kevin Dang
    Specialist · Oakland, CA · Member since 2014 · 83 posts · 28 votes
    8y

    @Michael Cornell I second on that strategy. After that, you can do a 1031 exchange. 

    1Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    8y

    @Michael Cornell read read read. Read everything and anything you can about real estate, and particularly property management. Get Ken McElroy's books on property management. Get NOLO's books on CA real estate law. Read up on the Oakland tenant laws/ordinances - there are a lot of them. You can do all of this for under $100. 

    BP will get you motivated but surely won't prepare you to be a landlord in Oakland. 

    1Reply
  • Calvin Kwan
    Oakland, CA · Member since 2015 · 246 posts · 127 votes
    8y

    Also join EBRHA.  They have weekly seminars where you can get a ton of education.  

    Like Saj mentioned above, learn the laws.  They can work for you, or against you.  You'll have many more options if you OMI and look for duplex/triplexes.

    1Reply
  • Sherwin Gonzales
    Rental Property Investor · San Francisco, CA · Member since 2015 · 236 posts · 156 votes
    8y

    @Michael Cornell in addition to the great advice everyone has already mentioned, I would suggest you attend some local meetups. There, you can network with fellow investors and share stories and experiences. Who knows, you might meet you next partners there! There's only so much reading and podcasts you can take. Your real knowledge comes from actual experience. Just continue to take action and you'll be fine. Good luck! 

    1Reply
  • Matt Ward
    Specialist · San Francisco Bay Area · Member since 2018 · 221 posts · 160 votes
    8y

    @Michael Cornell I second what @Sherwin Gonzales said, networking is invaluable!  Also, you might want to chat with a lender.  I recommend @Chris Mason... he's local and has a great pulse on the products available to someone in your situation.  You may be able to put down far less than you think.  If I were in your shoes, I'd do just that... first investment in Oakland is a great foundation.

    1Reply
  • Michael Cornell
    OP
    Oakland, CA · Member since 2017 · 5 posts · 0 votes
    8y
    Originally posted by @Sherwin Gonzales:

    @Michael Cornell in addition to the great advice everyone has already mentioned, I would suggest you attend some local meetups. There, you can network with fellow investors and share stories and experiences. Who knows, you might meet you next partners there! There's only so much reading and podcasts you can take. Your real knowledge comes from actual experience. Just continue to take action and you'll be fine. Good luck! 

     Thanks Do you know of any local meet ups that are active?

    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    8y

    Talk to a mortgage lender first before you waste much time chasing properties that over valued. Preapprove letter comes before anything else. 

    0Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    8y

    @Michael Cornell

    Buy and live in a multi-family is a great way to get into the game.  Like Sam said pre-approval is the first step, you need to know exactly what interest rate you qualify for and what your exact payment is.   The pre-approval will quickly determine which areas you can focus your attention on.  I think if Oakland is too expensive.  You can expand your search to San Leandro if you prefer to be South or expand it North to El Cerrito, Richmond (Annex, East Richmond Heights), and San Pablo.  

    Start looking online at current listings and closed sales.  This is a quick way to educate yourself.  You can get a good idea of the general market price for each area of focus.  Also look at sales in the area that have been rehab.  Now you have an idea what on what the potential can be.  

    0Reply
  • Michael Cornell
    OP
    Oakland, CA · Member since 2017 · 5 posts · 0 votes
    8y

    Thanks everyone.

    0Reply
  • Ryan Landis
    Residential Real Estate Broker · San Mateo, CA · Member since 2013 · 585 posts · 264 votes
    8y

    @Michael Cornell the buy a 2-4 unit is probably the best bet as others have mentioned. Your financing will be pretty solid in that range. A couple of quick things - buy where your commute won't suck. I know people talk about different markets outside of Oakland quite a bit on BP, but depending on where you work, you need to be Bartable and even then you don't want to be Barting an extra hour each day to save $10K spread across 30 years (just my 2 cents).

    On a 3-4 unit, you will likely run into self-sufficiency issues if you go FHA (most don't cover here). There are a few 5% down programs but those will just have to meet the loan limits/income restrictions (if applicable) to get the 3-4 units.

    0Reply
  • Shannon Witters
    Rental Property Investor · Pleasanton, CA · Member since 2018 · 46 posts · 20 votes
    8y

    @Michael Cornell  Not sure if you found any yet, there are several local meet ups SF, EBay and @DavidGreeene hosting one in Brentwood in Sept via eventbrite, others on meetup.com, and mentioned in BP.   New to BP myself and looking forward to networking and sharing.  Best wishes!

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