Rental Property Investor · Berkeley, CA · Member since 2018 · 30 posts · 18 votes
Greetings ladies and gentlemen,
So do you think it is possible to house hack in Oakland with the current market?
I am young and single, currently living in Berkeley and working in SF, I have some money I want to invest, and I will probably do out of state, but right now I am still eligible for FHA loan and entertaining the idea of house hacking here in Oakland. I would totally do that if I lived in a more hackable area, but I thought it's impossible here, I am still not sure and that's why I am asking. Also, I am not willing to move to a total hood, but rather somewhere relatively safe within a couple of miles from a Bart station, probably not further south from Lake Merritt station and surrounding areas. I saw some 2-4 plexes within 600-800k, but not sure what the rents would be and if I'll be able to buy them with FHA/3.5% down.
San Francisco Bay Area · Member since 2015 · 196 posts · 181 votes
7y
I'm doing it right now. House-hacking a duplex. I did buy 2 years ago though.
I am pretty sure you can still do it.
I'm shopping for my next house-hack. It's all about finding buildings where the rents are low, as that holds down the value of the building. Another approach is to bite the bullet, spend the $6-10K in relocation fees per the no-fault eviction ordinance. Then you can take down a fully occupied building with low rents in each unit, essentially getting a relatively cheaper building when comparing to similar buildings with a vacant unit.
If you do the math, paying $10k in tenant relocation fees to bring a triplex up in value by $200K - $300K is an investment worth making all day every day.
How are you evaluating your deals? Are you looking at banked rent increases? ... that is rent increases the current owner has the right to make but has not yet made. Those transfer to the new owner. See here:
"Property owners may defer applying annual rent increases up to 10 years. Rent increases that were not imposed within 10 years expire.
You should build those banked rent increases into your evaluations, and ask your agent to get you rough move-in dates, based on the estoppels in the listing agent's disclosure package.
Oakland, CA · Member since 2018 · 19 posts · 6 votes
6y
Hi @Frank Wheeler, the place I was looking at in Castlemont was on Auseon Ave. It seemed liked a quiet block but I only visited twice in the afternoon. When I went to visit with my partner we noticed a street memorial with candles and such a couple of blocks away. It seemed like someone might have been shot there recently. While our block seemed calm the surrounding blocks seemed more chaotic with houses in poor condition etc. Ultimately my partner didn't feel comfortable with that house. Now we are in escrow on a HUD property in Allendale. Turns out it is a complete fixer (more than just the cosmetic work we anticipated) so have just begun the 203k rehab loan process. We will see how that goes. Where are you looking now?
Oakland, CA · Member since 2018 · 19 posts · 6 votes
6y
@Frank Wheeler I also visited a house on Parker in Eastmont. That block seemed nice and quiet and it appeared that most people owned their homes. I talked to a neighbor there and he said people looked out for one another. Another quiet block was 77th Ave in Eastmont.
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
@Frank Wheeler @Lindsay Ferlin@Tobey Grey Castlemont and Eastmont areas are very much block by block. One of my rentals is a duplex in the Castlemont area and If you go one block to the north it is "up and coming", then the four blocks to the north of that are cool. Go one block to the South and it is a little noisy, then the next 3 or 4 blocks to the south of that are perfectly fine. Interestingly that place appreciated by 34% in just a 3 year period of time from when I bought it in 2016.