Mountain View, CA

13 Replies

Hey BP,

A friend of mine is moving out to the bay area right out of college. The rental market looks similar to what it is here in the DC market. That is, it makes more sense to buy than it does to rent.

She has a room mate already so would need 2 bedroom minimum, $3,000/month max budget. What are your thoughts on whether to rent or buy in the area between Mountain View and Foster City? What resources do you recommend I look into for a more in depth analysis of the specific market?

Originally posted by @Carson Sweezy :

Hey BP,

A friend of mine is moving out to the bay area right out of college. The rental market looks similar to what it is here in the DC market. That is, it makes more sense to buy than it does to rent.

She has a room mate already so would need 2 bedroom minimum, $3,000/month max budget. What are your thoughts on whether to rent or buy in the area between Mountain View and Foster City? What resources do you recommend I look into for a more in depth analysis of the specific market?

 I live in Mountain View. Houses here are going for around 1.3M. Does your friend have the ability to make that kind of down payment?

@Kevin Wood No she just graduated college, and will not be able to afford that. I'm sure there are areas near that have homes in the 400's. Do you know of any towns or neighborhoods?

Originally posted by @Carson Sweezy :

@Kevin Wood No she just graduated college, and will not be able to afford that. I'm sure there are areas near that have homes in the 400's. Do you know of any towns or neighborhoods?

 I haven't seen anything that isn't at least double that amount. Propertyradar.com is a pretty good tool to potentially find some deals.

@Carson Sweezy

 I am in the bay area and finding a single family home in the 400's anywhere between Mountain view and Foster is going to be almost impossible unless it is a dump and needs major work. I think their best bet may be a condo. Even a Condo is going to tight but may be possible.

Average sales price in Santa Clara county as of APilr 2015 is 960,000

http://www.car.org/marketdata/data/countysalesactivity/

@Carson Sweezy

 She could consider a condo in downtown SJ for around that price. The commute to Mountain View through Foster City would be about 25-35 minutes from there. I'd also be happy to help her find a rental if she would like some assistance. Feel free to reach out.

Can anyone help a newb learn how to delete and @username properly?

Originally posted by @Robert Musallam :

@Carson Sweezy

 She could consider a condo in downtown SJ for around that price. The commute to Mountain View through Foster City would be about 25-35 minutes from there. I'd also be happy to help her find a rental if she would like some assistance. Feel free to reach out.

 I don't see how a downtown SJ commute to Mountain View or Foster City would be 25-35 minutes. During commuting hours and in a car that's 45+ minutes and if you take the train it likely doesn't drop you near the industry you need, another 40+ minutes.

I'm also in the same boat, working a decent to good sales job but nowhere near the $50k downpayment for even the cheapest of places.

Any recommendations besides hoarding cash and potentially looking in surrounding areas I'm familiar with (Stockton/Manteca/Tracy, Santa Rosa/Sanoma, Monterey, Seaside, Salinas?) Even these locations are pretty expensive and don't offer the return.

I almost feel like just saving for a 3-4 unit in Mt. View and getting an FHA or subsidized loan doing the Brandon BB move of Househacking. The problem is it'll take at least a year if not longer for this. Or the out of state play but I'm sketch on that for my first purchase.

@Carson Sweezy do you know where she is going to be working (city)? As @David Affonso mentioned depending on where you are going, traffic on 101 and 280 can be rough.

If she is north of 92 (San Mateo/Foster City) she can look at San Bruno/Daly City/South San Francisco/Pacifica. If she is looking for a house at  the $400-500K price point, her options are limited (but things do come up although they are often very distressed). If she can go to the $500K+ price point she will have more options.

If she wants to stay on the Peninsula, she can also look at some of the properties further west (there are some gorgeous state parks/cabin almost like homes out there).

Feel free to send me a PM or give me a call and I am happy to give you an overview of the market and options (I am currently working with some buyers in that price point so I know a bit about it).

$400K in the Peninsula is near impossible even in the condo market.  I would look into going East across one of the bridges (Newark/ Fremont/ Union City/ Hayward areas).  You'll get more for your money for either buy or rent at $3K/ mo.

Hey guys thanks for chiming in. 

She ended up renting somewhere near Mountain View, I dont remember the town. But the rent was somewhere at $3500 for a 2 bedroom. 

"it makes more sense to buy than it does to rent." Based on what? The rent day 1 would be lower that the mortgage day 1? What would the rent be day 10,950, probably more than day 1 ... what would the mortgage be? Perhaps on day 10,950 she would be receiving rent rather than paying it. How much value add and capital gains can you get on a rental?

I'm not saying or even implying that buying is better choice for your friend than renting in Mountain View, or for anyone else anywhere else for that matter. All I'm saying is that you can't think about things so 1 dimensionally ... there are many considerations to this seemingly simple question. It all depends on your friend's goals, needs, wants, exit strategies, finances, skills, drive, etc. as to which would be a better option for her, and that may not be the best option for somebody else. Just because it is expensive does not mean it is a bad investment ... the opposite is also true. [email protected] Le?

Hey @David Affonso It certainly depends on when you leave. I used to work in SF and lived in Downtown and would regularly get to work in 45 minutes at 7 in the morning via 280. May be different now 2 years later. But that was my experience. 

Mountain View multifamily properties will probably be out of your reach, at the moment, I'm aware of some duplexes going for $1.5M. But obviously, that's way too much for someone just starting out and I can't imagine a scenario where you'd be cash flowing on those any time soon. 

What you could be looking for is a single family home that also has the ability to convert to a 2 unit housing situation. Many properties in Downtown are set up like this and are still priced appropriately for the first time home buyer in this area. 

Originally posted by @Robert Musallam :

Hey @David Affonso

What you could be looking for is a single family home that also has the ability to convert to a 2 unit housing situation. Many properties in Downtown are set up like this and are still priced appropriately for the first time home buyer in this area. 

This sounds very interesting.  I presume you'd just include the reno cost into your numbers.  I wonder if it'd be possible to cashflow from day 1 after taking these costs into consideration.

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