All Forum Posts by: J. Martin

@Ori Skloot,

I don't have a cleaner with extra time right now, but plan on finding some back ups. 

TaskRabbit can be tough, because you get a different person every time, depending on who's available. (unless you get their info personally and call them back outside the app)

I think it's best to find someone reliable that's closeby. If they're running around in traffic, you'll get more delays. 

Can you keep freshly washed linens, extra supplies, and cleaning stuff on-site? Maybe in a locked closet? Or put in some small locking cupboard? 

In case a cleaner doesn't show up, having everything on-site will save you. On that note, be sure to have an extra extra set of keys for the backup cleaner or other access. (if not all electronic). 

Also, I recommend having a written checklist for them to perform, so you get consistent results, and someone else can do the work if you don't have your regular people (like task rabbit). Print some extra copies and keep them with your supplies/cleaning stuff for the cleaning staff. 

Guesty charges 3% of revenue for their software, and also has features to text your cleaner, which is a nice reminder. I like it a lot, because you can automate all the check-in/out emails with the guest also. 

$30 sounds way too cheap to get someone to go out there at a particular time of day, every day you need it. $40 also doesn't sound super compelling, considering what needs to get done. Get a couple quotes to figure out a good price, pay what it's worth to make sure it gets done, and charge the guest accordingly. They're mostly looking at the final price. Not necessarily trying to nitpick the cleaning fee. 

Good luck Ori!
Way to take the leap!! :)

(And yes, you priced too low if you booked up the whole summer that fast ;)

@Lauren Heart,

Glad you're excited too :)

@Account Closed's last Summit, so your turn to come down! We can always use some help, depending on how much time you have :)  Any particular speakers that you're interested in this year? Or someone you wanted to meet? 

 Anita, what @David Faulkner is saying is that a lot of people like to market to California turnkey investors, so they have keyword alerts for it, and you'll get messaged quickly. I recommend going to local meetups from the events section on BP or on Meetup, and go meet those investors you want. @Ryder Meehan does an out of state meetup every month. I'll be there on the next one too, even though I'm not necessarily looking to invest out of state. Good time. 

@Sudeep Jain,
"The rents just about cover the mortgage and taxes. This means I will only have internal returns for a while, and Ill have to rely on appreciation for the investment to make any sense. Am I missing some crucial piece of information here?"

@Andrew Muff,
"The condo we have just appraised for slightly less than your target for the SFR and as that neighborhood improves we expect the appreciation we've experienced to continue."

Hard to decide which signs are the best indicators of the beginning of the end of this cycle: the data, or the speculation and optimism! (it's different this time! ;) @Account Closed - which do you think? hehe 

Andrew, you expect condo appreciation since 2012 in West Oakland to continue? 
Sudeep, we are in the late phase of an expansionary cycle, and appreciation rates are slowing. In addition, West Oakland has some of the more volatile prices in the SF Bay Area, which is why I bought a duplex up by Andrew's place in 2014 for $300K. You will be negative cash flow on your SFR as it sits after paying for maintenance, even more negative cash flow if the significantly increased rents in West Oakland soften, and are buying at a time of the economic cycle that tends to produce the least large appreciation gains, based on history.

The best appreciation gains tend to come after the unemployment rate hits a peak, and the economy starts to improve. They tend to be lower or negative after the unemployment rate hits a low. Look at which years in history have the same jobs characteristics as today and ask yourself if you would have also liked to buy in those years. If your answer is you're a baller tech employee who can afford whatever monthly shortfall, and are holding for 20 years and you don't care, then go for it..

Our attendees last year were an awesome group to connect with! I feel lucky to know so many awesome people - knowledgeable in so many different areas, super kind and caring people (mostly! lol), and a few have even come out to help volunteer to clean up Oakland a couple months back :) @Katie P., @Janet Voss, @Account Closed . 
Alice, you're all set with your ticket! How can I make the Summit the best for you? What do you want out of it? 

@Atish Shah,

With your target GRM and desire for low-crime, good-school district areas, you sort of want the best of both worlds - high cash flow, and a good area likely to have strong single family home appreciation. And I want to be rich and famous. But we both have to struggle with reality hehe You would either need to go somewhere else, or decide which is more important to you (or at least compromise).

Like @Brian Burke is saying, you're looking at single family home prices, but trying to buy more than one unit. You probably need to go even further than what Brian is saying, and compare how much in rents you can get with $X00,000 of a multi-unit building in city 1, vs city 2, vs city 3, etc. Or just call up an agent that deals with them, and they should be able to give you a range of GRM's. CBRE and other commercial real estate brokerages also publish data on GRMs for large multifamily in different cities. You will have a higher GRM for 4-unit buildings and under than for large multifamily, but I think the proportions across different cities will be similar - as a place to start.

If you can get a vacant 4 unit in Richmond, you might be able to get close to 1% / 8-9 GRM(ish). Maybe in Vallejo also, but that's getting further out, and the city's all f**ked up after the BK and high taxes. (Richmond could be going that way too though! lol) @Diane G., play nice with the other kids in the sandbox ;) Atish is trying to learn. I could still buy under a 10 GRM today (especially after some transitioning). @Arlen Chou did the same last year in Oakland, when everyone said it couldn't be done.  Given, they aren't in Silicon Valley... 

@Arlen Chou

 *TX*
HOUSTON
Tim, at first, it was just the Houston / Sugarlands area and the oil drop that was causing increases in the unemployment rate, and Austin was still booming. Houston has looked like it is in a recession, compared to the prior 3 recessions, since the last half of 2016. The unemployment rate hit a low of 4.1% in April 2015. By Feb 2017, the Houston area unemployment rate had increased to 5.9%, a 1.8 percentage point increase that has signaled the last 3 recessions. 

* the grey shading and blue line in future are my speculation, based on looking at the prior cycles. Look where the unemployment rate spikes, and recessions have occurred in the past. 

AUSTIN
Through the end of 2016, Austin was holding its own, even though Houston unemployment was going down the toilet. However, the Austin unemployment rate has been bouncing around 3% and higher since it first hit 3.0% in April 2015, when Houston as also at its best. In the last 2 years, you see the Austin unemployment rate has gone flat and slightly increased - not offsetting Houston's losses like it used to in 2016. 

SAN ANTONIO
San Antonio area is a similar story to Austin. While doing better than the Houston area, the party appears mostly over. The unemployment rate in April today is higher than April of 2015. 

The caveat here with the national recession being called was in the 1990's recession. It looks like TX was already well into a recession, with high unemployment rates, before a recession for the whole country was called. Oil prices dropped in half in the year 1986 alone, along with a 6-year price drop due to the 80's oil crisis. So we could see TX in its own localized recession for a while before a nationwide recession is identified by the NBER and added as grey shading in the graph... 

*Prices not dropping during Dot Com bust*
It's hard to find in the data, but have heard anecdotally from quite a few people that have lived in the Valley for a while that SFH prices in core Silicon Valley definitely dropped temporarily during the dot come bust - Cupertino and Mountain View specifically mentioned. Maybe @Sandeep S., @Kathryn M. , or @Arlen Chou can add more to that. 

*NOMINAL VS REAL PRICE*
Tim, I like the comparison with inflation. However, I would note that your trend lines on your graphs are linear, as is your Y axis for prices, which makes less and less sense over a longer time horizon. The growth of nominal prices should grow by % increases over time, which will lead to an upward-curved, exponential type of growth in nominal prices. So I wouldn't extend/extrapolate those trend lines to come up with whether or not the market is reasonable. Just my 2 cents..

WHY CAN'T WE DANCE FOREVER?

"On another note, what keeps us from every staying at low unemployment? It's very interesting that every time it gets that low we can't keep it there"

There are many reasons booms have not gone on forever, in the history of the recorded world (and that they end fairly regularly). Depending on the cycle... Usually..

- employers can no longer find qualified employees as productive as existing employees, at the same cost (have you tried to hire people lately?)
- wages start to increase, squeezing employers, and increasing prices 

- after a long cycle of easing credit and fierce competition among financial institutions for lending business, and consumers & investors stretching themselves more, credit terms start to tighten again 
- the Federal Reserve increases interest rates, increasing the cost of borrowing 
- usually, oil/energy prices increase with increased US & global consumption, increasing costs across industries
- consumers got used to the wind at their back and got used to it. They eventually tighten up, faced with a higher credit and interest rate burden, rising prices, less access to capital from tightening credit..
- businesses foresee a slowdown in consumer spending, and reduce hiring and capital investment
- .. which causes consumers to hunker down more, and then businesses to hunker down more.. and so on and so forth.. 

Janet Yellen famously said a bit back
"Expansions don't die of old age." 
I guess you could also that old people don't die of old age. 
They die due to one of the many maladies that have largely been created by their long life span. ;)

@Minh 

@Account Closed , anything to add? 

@DG A.,

@Calvin Kwan is correct. 

The Accessory Dwelling Unit (ADU) guidelines are for single family homes - not duplexes. If you want to add another unit to a duplex, you need to have 3-unit zoning or get a variance (can be very difficult) Here is the language from the city as of May 12, 2017:

"A "Secondary unit" (also known as “accessory dwelling unit,” “in-law unit”, or “granny flat”) is an attached or detached accessory dwelling unit that is located on the same lot as an existing One-Family Dwelling facility..."

http://www2.oaklandnet.com/oakca1/groups/ceda/docu...

I looked into it for the duplex I have in West Oakland. Let me know if you find anything different.. 

Sorry, didn't answer your questions..

I think about 75% were for 2 days. A lot of the Bay Area folks just drove home. But some get a hotel so they can hang out and drink ;) We should have the group hotel rate next week.  

I'm really looking forward to it!