Multi family cash flow in San Jose
Bay area in CA · Member since 2024 · 17 posts · 13 votes
Multi family cash flow in San Jose
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Real Estate Agent · Member since 2023 · 831 posts · 577 votes
2yHey Hyeonji, would you consider investing out of state? The market I focus on is Cleveland, Ohio, and it's a great market for multi-family cash. You might not be able to house hack all the way from Cali, hahah, but you can find off market deals here that are hitting the 1% rules and higher.
12 Replies
- Real Estate Agent · Fresno, CA · Member since 2014 · 367 posts · 174 votes2y
hi @Hyeonji Oh, getting started is the hardest part, congrats on moving forward! We were all new once. Books, podcasts, blogs are all great ways to get started learning. The best first step you can do is get pre-qualified with a good lender, then start looking at and analyzing potential properties. You learn a lot by going through the motions. Eventually you will find a property you are ready to buy and then you start the land lording process which is your next adventure. Just keep moving forward and you will do great!
- Realtor · Gilroy, CA · Member since 2016 · 255 posts · 72 votes2y
@Hyeonji Oh , you may be able to purchase your primary home using Santa Clara County's Empower Homebuyers shared appreciation down payment assistance programs. They can lend you up to $250,000 towards a down payment if you are a first-time homebuyer, live or work in the county, and meet their income criteria, which I believe is up to 120% of the area's median income. Then use your savings to purchase an investment property.
- Bay area in CA · Member since 2024 · 17 posts · 13 votes2yI didn't know Santa Clara County had this loan. It is a great opportunity to buy a house near my area. Thank you for sharing!
Quote from @Jeet Sangha:
@Hyeonji Oh , you may be able to purchase your primary home using Santa Clara County's Empower Homebuyers shared appreciation down payment assistance programs. They can lend you up to $250,000 towards a down payment if you are a first-time homebuyer, live or work in the county, and meet their income criteria, which I believe is up to 120% of the area's median income. Then use your savings to purchase an investment property.
- Realtor · Gilroy, CA · Member since 2016 · 255 posts · 72 votes2y
Quote from @Hyeonji Oh:
I didn't know Santa Clara County had this loan. It is a great opportunity to buy a house near my area. Thank you for sharing!Quote from @Jeet Sangha:
@Hyeonji Oh , you may be able to purchase your primary home using Santa Clara County's Empower Homebuyers shared appreciation down payment assistance programs. They can lend you up to $250,000 towards a down payment if you are a first-time homebuyer, live or work in the county, and meet their income criteria, which I believe is up to 120% of the area's median income. Then use your savings to purchase an investment property.
If you decide to pursue this option, I have a qualified lender who can assist you with this program. Not every lender is certified to offer this type of service.
- Real Estate Agent · Member since 2023 · 831 posts · 577 votes2y
Hey Hyeonji, would you consider investing out of state? The market I focus on is Cleveland, Ohio, and it's a great market for multi-family cash. You might not be able to house hack all the way from Cali, hahah, but you can find off market deals here that are hitting the 1% rules and higher.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes2y
Quote from @Nadeem Alamgir:
Hey Hyeonji, would you consider investing out of state? The market I focus on is Cleveland, Ohio, and it's a great market for multi-family cash. You might not be able to house hack all the way from Cali, hahah, but you can find off market deals here that are hitting the 1% rules and higher.
If you're gonna go to Cleveland as an out of state investor you're going to want to proceed with caution. Cleveland is great, but it's a complicated market for out of state investors. Before spending any money I would read The Ultimate Guide to Grading Cleveland Neighborhoods to give yourself a good understanding of what's what cuz it ain't all sunshine and rainbows out here.
- 2yAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Hyeonji Oh:
Hello,
I am reading a Multi-family millionaire book right now, I am curious if it is possible to make cash flow in San Jose by living in a multi-family unit and renting out another. It is ideal to build up an asset as the book says but the house prince is insane in San Jose!
Currently, I live in San Jose and work in Silicon Valley. I don't have a primary home or investment property. If househacking is possible I would rather buy my primary house using a low down payment for first-home buyers than invest in other properties in Sacramento, Modesto, Fresno, etc. Any advice is welcome! I feel I am lost and don't know what I should do.
I don't think it will be possible to cashflow at all in San Jose. I work with a ton of investors in California and Seattle who love buying properties here in the Columbus market.
I made some resources for my out-of-state investors like a neighborhood graded map and contractor rolodex that I can share with you!
ReafCo | Ahmed Group 55 Reviews - Member since 2023 · 111 posts · 70 votes2yI'm not an expert on San Jose. But if the prices are what I expect, the only options are to buy a house and be a Live-In Landlord or buy a multifamily of 2-4 units using a primary home loan.
Quote from @Hyeonji Oh:
Hello,
I am reading a Multi-family millionaire book right now, I am curious if it is possible to make cash flow in San Jose by living in a multi-family unit and renting out another. It is ideal to build up an asset as the book says but the house prince is insane in San Jose!
Currently, I live in San Jose and work in Silicon Valley. I don't have a primary home or investment property. If househacking is possible I would rather buy my primary house using a low down payment for first-home buyers than invest in other properties in Sacramento, Modesto, Fresno, etc. Any advice is welcome! I feel I am lost and don't know what I should do.
For strategy, you can have a mix of long-term and short-term tenants in the other units.
But even with doing all of that, you most likely still will have to pay a portion of the mortgage as its very very hard to cashflow in California.
Cali is mostly an Equity Play state. But I don't like the landlord laws there so you will have to do a LOT of due diligence to make sure it's even feasible to buy there.
But if the numbers make sense to you and you get to keep the majority of your paycheck instead of paying rent. You win.
L. Thomas - Real Estate Agent · Member since 2023 · 831 posts · 577 votes2y
Quote from @James Wise:
Quote from @Nadeem Alamgir:
Hey Hyeonji, would you consider investing out of state? The market I focus on is Cleveland, Ohio, and it's a great market for multi-family cash. You might not be able to house hack all the way from Cali, hahah, but you can find off market deals here that are hitting the 1% rules and higher.
If you're gonna go to Cleveland as an out of state investor you're going to want to proceed with caution. Cleveland is great, but it's a complicated market for out of state investors. Before spending any money I would read The Ultimate Guide to Grading Cleveland Neighborhoods to give yourself a good understanding of what's what cuz it ain't all sunshine and rainbows out here.
I agree! You definitely want to work with an agent who knows his areas and way around town. That grading map is a good place to start.
- 2yRaju BalakrishnanPro MemberRental Property Investor · Santa Clara, CA · Member since 2016 · 219 posts · 112 votes
It may be hard to cash flow directly even by house-hacking. But you will be saving money when you add your cost of rent also. Consider fourplexes instead of duplexes if you can afford for better cashflow. In bay area, if you can buy anything most likely appreciation and time will do its magic over years (i.e. 7.2% average appreciation over last 25 years).
- 2yChad HalePro MemberProperty Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
@Hyeonji Oh Either house hacking a SFR or buying a multifamily (4+ units typically) will allow you to get into the bay area market. That is the hardest step. Once you own here and a few years go buy, you'll feel incredibly blessed to have your own property both in terms of cash flow and appreciation.
There is a saying of owning real estate here: "It's the bay area retirement plan". Whether you stay here long term or move, you'll have good equity and options.
- 2yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
Navigating the real estate market, especially in high-priced areas like San Jose, can indeed be challenging. However, house hacking is still possible, although it may require some creativity and strategic planning. Here are a few considerations and potential strategies to explore:
Examine the dynamics of local markets: Start by doing extensive research on the San Jose local real estate market. Recognize the demand for multi-family units, rental prices, vacancy rates, and property values as of right now. With the correct strategy, possibilities for cash flow may still exist even when pricing may be high.
Explore Other Multi-Family Options: In more reasonably priced communities in or around San Jose, look for other multi-family homes like duplexes, triplexes, or small apartment complexes. When compared to bigger complexes in desirable neighborhoods, these properties could have a higher potential for cash flow.
Examine Financing alternatives: Look into financing alternatives, such as FHA loans with low down payments, that are geared for first-time homebuyers or owner-occupants. These initiatives make it easier for you to purchase a property with less money down, increasing the viability of house hacking.
Strategic Property Selection: Pay attention to assets that offer prospects for value addition and have a high rental potential. Seek for homes where property management may be optimized or where renovations and enhancements might raise rental income.
Long-Term View: Although cash flow could be difficult initially, take into account Silicon Valley real estate's potential for long-term value. The property may still be a valuable asset that increases in value over time and creates wealth through equity expansion even if it doesn't cash flow at first.
Examine Renting by the Room: If the house is a bigger multi-family unit, renting out individual rooms inside it is an additional way to optimize rental income. When compared to renting out the full unit, this method can frequently result in higher overall rental income.
Seek Professional Advice: If you're looking for advice, think about speaking with a San Jose-focused investment adviser or local real estate agent. They may offer insightful information, support you in seeing prospects, and walk you through the buying process.
Ultimately, your financial objectives, risk tolerance, and personal tastes will determine whether you want to investigate investing alternatives elsewhere or take up house hacking in San Jose. Take your time, thoroughly weigh your alternatives, and think about consulting experts who can offer customized counsel based on your unique situation.
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