Househacking in the Bay Area
Hi all,
Long term BP member but infrequent poster. I currently rent in SF (SoMa) but starting to consider a MF purchase in Q1 using a FHA loan. The idea would be to move into one unit while renting the other(s). I don't expect to cover all of my PITI with tenants, but I'm hoping to be able to reduce my housing expenditure from my current rent ($3.5/mo) while building some equity.
The FHA limit in the Bay Area means I will be looking at roughly $1m as the purchase price. I work in Palo Alto and my wife works in SF. Location will be one of the primary drivers of the decision for us, working remote post-COVID is not an option for either of us.
At this time, I am starting to see what is in the market and developing some thoughts on what would make sense versus what would not. I'm going to list a few options on the MLS today with some of my thoughts, and would love thoughts from the Bay Area veterans on opportunities, concerns, or things to keep in mind. I'm not looking to act on any of these, this is an exercise to help me get better to recognize opportunities or pitfalls when I am ready.
Long-term plan would be to move out in a few years, rent at market price, and keep the (hopefully cashflowing) property.
1. 6414 Benvenue Ave, Oakland
Pro: great location, close to Bart, potential for ADU in the garage
Cons: Long commute for me, priced too low?
The idea here would be to move into one of the three units (assuming one is vacant) and over time, build out the ADU as well. If one is not vacant, with the limitations on evictions, am I just stuck waiting till they all expire?
Any other options here that could be interesting to explore?
If rent is not disclosed in a public listing, is it safe to assume they are well below market, or does it not mean anything?
2. 1508 Jefferson Ave, Redwood City
Pro: Close to Caltrain, looks like good condition. Two decent garages with a driveway at the back - opportunity to add bedrooms in both units / ADU?
Con: Commute for my wife and myself
Listing says both have tenants, but details only include the rent for Unit #2. Does this imply Unit 1 is well below this?
I know SF well. In Redwood City, how appealing is the location? In my mind, proximity to Caltrain is going to drive rental interest, especially with one-bedroom units. Is that fair?
3. 1725 Berkeley Way, Berkeley
Pro: Close to Bart, and I really like this part of Berkeley. Likelihood of garage turning into ADU?
Con: Long commute for me. Condition doesn't look great so needs work. Not sure I want to commit to this much work in my first property. Also, will likely go over my budget if I need to update both units before renting / moving in.
Does not disclose if currently rented or not.
Looking forward to hearing thoughts from the BP community!