East Bay Real Estate Investing in 2020 (Section 8, BRRR...)

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East Bay Real Estate Investing in 2020 (Section 8, BRRR...)

Jessica Jones
Member since 2020 · 16 posts · 8 votes

Hi All-

First off, how am I just discovering Bigger Pockets!?? I am incredibly grateful that I found this podcast and community. I'm a Registered Dietitian & Entrepreneur and I have been passionate about real estate ever since I was 6 years old (seriously... I used to find open houses in the Penny Saver and beg my mom to take me). 

My husband and I purchased our first property in the Richmond Annex in 2018 (a 2/1 with an unfinished basement). Last year we renovated the basement and turned it into a permitted 450-square foot studio and have been renting it out to traveling nurses every since. 

We are looking to grow our portfolio and are thinking about using the BRRR method to rent out via Section 8.


I have three questions:

-Does anyone have any experience with Section 8 in the East Bay (Richmond, Antioch, San Pablo, Pitsburg, San Leandro, Hayward, Oakland, etc)? What has your experience been like? Are there a lot of applicants for 4,5,6 bedroom homes? Is the process seamless as a landlord? Have you ever seen the fair market rents DECREASE (or has funding been cut?)

-What are the cities in the East Bay that you recommend investing, especially if I am looking for a SMR with a PP under $400,000


Lastly, I'm looking to connect with any other East Bay investors to offer each other support, exchange ideas, analyze deals, etc. Please don't hesitate to contact me as I'd love to connect!

Thank you!

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Jerome KaidorPro Member
Investor · Hayward, CA · Member since 2013 · 139 posts · 65 votes
6y
And I have a building in Hayward with a few Section 8 tenants.  I've found the Alameda County housing authority easy to deal with.  They direct deposit the rent to my bank every month.  They gave me a reasonable rent increase that I asked for without any fuss.  Interestingly, Section 8 apartments are exempt from the current version of Hayward rent control.

At the time of the last government shutdown, I was worried that Section 8 might run out of money, but that didn't happen.
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  • 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

    @Jessica Jones   I have experience in working with Section 8 in the East Bay. I have rentals in Contra Costa County and Alameda County that I have put Section 8 tenants in. 

    1Reply
  • Jerome KaidorPro Member
    Investor · Hayward, CA · Member since 2013 · 139 posts · 65 votes
    6y
    And I have a building in Hayward with a few Section 8 tenants.  I've found the Alameda County housing authority easy to deal with.  They direct deposit the rent to my bank every month.  They gave me a reasonable rent increase that I asked for without any fuss.  Interestingly, Section 8 apartments are exempt from the current version of Hayward rent control.

    At the time of the last government shutdown, I was worried that Section 8 might run out of money, but that didn't happen.
    2Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    6y

    @Jessica Jones welcome to BP. Nothing is seamless being a landlord here in California, especially the Bay Area. Even more so dealing with the Housing Authorities. 

    I’ve never seen FMRs decrease but I’ve only been an Oakland landlord for 6 years. I’ve noticed that there are much fewer 3bed voucher holders than 2beds and 1beds. I can assume there are not many holders of 4-6 either but also there is probably not many units either. Demand could be low but so could supply. 

    My experience with OHA has been so-so. It’s typical gov’t red tape but the guarantee is well worth it. If you end up buying in Oakland, I can give you some pointers in dealing with them. 

    With your price point I recommend Richmond. There isn’t much here in Oakland under $400K. But rents are higher here so keep that in mind. 

    1Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    Hi @Jessica Jones, I'm glad you found BP, it's a great site to learn and network on! 

    0Reply
  • 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

    @Jerome Kaidor   @Account Closed     Feel blessed. The CMHA  Cuyahoga Metropolitan Housing Authority in Cleveland make's the Oakland Housing Authority seem tame. Last month I had a Section 8 inspector out there "Fail" one of my rentals when they didn't even show up for the inspection! My PM told me the inspector literally never even showed up and they waited all day for her. Rather than be accountable and admit she didn't show up, she simply failed the unit. My PM ended up reporting to her supervisor what kind of nonsense this was and they ended up sending someone else out and they magically "Passed" the unit :-)

    As for being worried about a Govt. Shutdown and the Section 8 Voucher money not coming through.....I don't think any local politician wants that to happen on their "watch".  With politicians bending over backwards with "affordable housing" talk.....can you imagine how that would look if a landlord and their (about to be displaced) tenant is on the news?  

    Landlord: I'm doing the right thing offering affordable housing and taking Section 8, and now the government is drying up my funding for the moment and I can't afford to keep offering affordable housing.

    Tenant: I'm losing my place to live because this nice landlord and I lost our funding to stay in the rental unit!

    Politician: We're doing the best we can.

    Reporter: Didn't you base a large amount of your political campaign on promising that everyone would be able to have an affordable place to live? How could you let this happen?

    1Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Brian Garlington Thanks for responding! Have you had success in those areas? What is your vacancy factor? Are you able to get section 8 to pay you 100% of the fair market rate?

    0Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Jerome Kaidor Thanks for your reply! I was worried about that as well (government not paying) but am happy to hear that your payments went through and that Alameda County is easy to deal with. How have you been able to find deals in Hayward that lend themselves to cash flow? My husband and I almost put an offer on a duplex last night in Richmond, but the listing agent said that wanted 200K over ask (which was insane) or they wouldn't consider it. 

    0Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Account Closed THANK YOU for this info!! Do you mostly do 1 and 2beds then? And do you only do section 8 in multifamilies? It seems pretty hard to cash flow when my debt/mortgage would be so high, even with section 8. Also, do they give you 100% of the Oakland "fair market rate" or do you have to allocate some of those funds to utilities. Thanks in advance for any info!

    1Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Brian Garlington GREAT POINTS!!! Didn't think of it that way in terms of local politics, etc. Thanks for the insight!

    0Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    6y
    Originally posted by @Jessica Jones:

    @Account Closed THANK YOU for this info!! Do you mostly do 1 and 2beds then? And do you only do section 8 in multifamilies? It seems pretty hard to cash flow when my debt/mortgage would be so high, even with section 8. Also, do they give you 100% of the Oakland "fair market rate" or do you have to allocate some of those funds to utilities. Thanks in advance for any info!

    mainly 1-2 beds with a few 3beds mixed in. $3100 for a 3bed in the hood, how could you not cash flow? :)  and yes I only rent to Section 8 voucher holders. 


    single family homes rarely cash flow so I suggest you look at multi family, even if it’s just a tri/quad plex.     
    When you have a new tenant, they run comps and pay what the market can bear. Utilities have nothing to do with the rent amount, it only affects the tenant’s portion. 

    0Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Account Closed For contra costa the 3bed is also around $3100. They will always give you the MAX of the fair market rate, right? ALso if you buy MF, how do you get folks already there to pay market rent. I'm worried about the people who are there paying 1/3 of market prices, etc. 

    0Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    Also thank you for your answers!! This is really helpful

    0Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    6y
    Originally posted by @Jessica Jones:

    @Account Closed For contra costa the 3bed is also around $3100. They will always give you the MAX of the fair market rate, right? ALso if you buy MF, how do you get folks already there to pay market rent. I'm worried about the people who are there paying 1/3 of market prices, etc. 

    Max means nothing. They will check comps and offer you an amount, based on non-subsidized (market rate) units. 

    1Reply
  • Jason Monroe
    Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
    6y

    I have multi family properties in Oakland CA 

    I have worked with agencies and those agents will often times provide the MAXIMUM schedule for the unit type. Section 8 will always do comps. All of my section 8 units are 2bd 1ba

    1Reply
  • Jason Monroe
    Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
    6y

    As @Brian Garlington has mentioned I have not had any super challenging experiences with housing in Oakland. The inspectors show up if they have findings a correction can happen and a new inspection date scheduled and they have shown up for that re-inspect as well. 

    A friend of mine has a 3/1 SFH in San Pablo, CA and a section 8 tenant. The comps were evaluated in that instance as well.

    0Reply
  • Jessica Jones
    OP
    Member since 2020 · 16 posts · 8 votes
    6y

    @Jason Monroe Thanks for your response!

    1Reply
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