All Forum Posts by: J. Martin

@Steve Cook , @Ken Lau , and @Alex M. , I organized our next East Bay Meetup for the evening of January 16th near 12th St BART. Good group so far.. Come out and say hi and see what everyone is up to! It was a great meetup last time..

http://www.biggerpockets.com/forums/88/topics/109953-east-bay-meetup---thurs-jan-16-2014-in-oakland

@Account Closed ,

The way I got started in the Bay with less than that in cash was buying a 4plex with an FHA at 3.5% and had the seller pay all the closing costs (w/ a little bit higher offer). And I did in the Bay! @Jon Holdman and others are right that MOST bay area properties don't cash flow (and had a lot of other good advice about expenses). However, they can be had here in the Bay, without going inland (like Stockton), or going out of state (not my cup of tea for now.) You just have to be a bit more on the periphery of the Bay..

An alternative for this amount of funds would be to invest in something cheap out of state. Or invest alongside an investor here in the Bay. That's what I have done for my partners. I haven't quite gotten the level of comfort to totally place my success on someone in another state, but maybe someday I'll venture out that way..

I organized a meetup in Oakland on Jan 16th if you want to come out and see what other people are up to.. Good group so far.. Good luck Orion!

http://www.biggerpockets.com/forums/88/topics/109953-east-bay-meetup---thurs-jan-16-2014-in-oakland

A lot of common themes here..

- Stretching yourself too thin (either to get deals done - or enjoying life;)
- Being too lenient with "stakeholders" (tenants/contractors/partners)
- Maximizing returns / leaving money on the table
- Having plenty of reserves!

@Account Closed , care to share with the class any mistakes or lessons learned from the last year? (We'll have to do the success stories on the next round!)

@Rob Shah , I agree with @Elizabeth Colegrove . Call around, or if you're close enough to a major metro area, you can look them up on Google and walk in and meet them in person. Typically, your cash flow will have to be able to service the debt flow by a good margin, even on an amortized basis on the equity line. Many banks will have fixed-rate 15yr am option or interest-only for a number of years, variable rate, then terms out over 10-20 years. Investment properties are much lower LTV's, and higher rates. They're not small, but if US Bank is in the area, I think they're doing HELOCS. I also heard Pentagon Federal Credit Union does a lot. They're in a lot of the US or may do business with you. You just have to contribute $20 or so to some charity to join..

Banks are itching to get higher-yielding assets than the paltry returns they're getting in MBS and bonds, so I'm sure you can find someone if your credit and CF situation is good/decent. They get a little fickle about how they count rental income though.. Good luck!

Hi John, and welcome to BP! There are a lot of super helpful people and great advice on this site! I’m a ‘fix and hold’ investor from the Bay Area in CA, and loving it! A lot of others doing flips, wholesaling, notes, everything.. A few tips..

You'll find lots of good info in the "Learn" link across the top navigation bar, and in the link at the top of the introduction forum. You can click on the "vote" button if you like someone's post or is helpful. You can tag people by typing @ before you type their name, then clicking their name when it pops up at the bottom of the message box. And you can earn "awards" for various "achievements" - just look at your profile. Hope that helps with the site, and dig in! Good luck on your investments!

@Shakir Ansari , you area code is PA and so is your profile.. The meetup is in Oakland, CA. If you're moving out here or on travels, you're welcome to join! If it's a different Oakland, I'm sure you'll be able to find something locally!

@Account Closed , I wish I had the details, but it was just a loan I was peeking at over a colleague's shoulder. I'm used to low cap rates in prime neighborhoods in SF - like 4% low.. but 2.5%? Caught my ear..

I think the buyer intends to owner-occupy one both of the units in the future, so I think it was just a matter of getting it early before waiting to see what prices are in 5 years.. Plus, I think the cap is less meaningful for duplexes, especially for a potential owner-occupied place, like you see more often in SF than in Vegas I think.. So I think that's another thing that throws the numbers out of whack..But I have seen quite a few 4% cap rates on MF in strong neighborhoods..

@Jeff J. , I also have a small, speculative portion of my investment portfolio - right now, it is all tied up in bitcoins, litecoins, peercoins, terracoins, and feathercoins (cryptocurrencies). Was up over 100%. Then a bit negative. Now back in the green.. Wildly speculative. But to your point comparing to RE price appreciation, given historical price volatility and expected volatility (if we were estimating a beta on the volatility of these assets, to say, the S&P 500), I think our bitcoin and uranium-mining investments would produce low risk-adjusted returns relative to the phenomenal ROE prime SF investors have made investing at this cap rate with little volatility in price, except steadily upwards..

...and if you don't know who the sucker at the table is.. then it might just be..

@Bryan Hancock , it's a different world out here. But people that have been buying these low-cap rate properties in prime areas of SF and the Peninsula have made a killing for several decades in a row now - without the big price drops that all the "workhorse" 2% rentals on BP had. Is that more speculative or risky than being exposed to the wild ride of prices on those "cash-flow" properties? I'm all cash flow now and don't have deep enough pockets for stuff like that in SF for the time being.. But what looks like crazy numbers on the surface has paid off well for some for a long time.. I agree though, not a fan of rent control. Warning: future results may not reflect historical results! lol

@Account Closed , that's a great rate!... but if I can borrower $1MM at 1.99% for every $1MM I have in the bank.. I wouldn't be borrowing very much! lol. Luckily for me, there's other lenders that will bank us little guys too ;)

@Mat Lewczenko , I hear you on reserves, reserves, reserves..

I was hoping maybe some of the BP Moderators like @Joshua Dorkin or @Brandon Turner could share some of their "lessons learned" from the last year. I'm sure that level of experience brings its share of learning opportunities..

Depends how much leverage you have in the market there.. Split it down the middle at $162.5K.. $2,500 isn't going to break this deal.. Or better, go with their $165K but ask for a $2500 credit to cover closing costs (and help you with your rehab project), In my area, this would have been gone a long time ago, so maybe you have more negotiating power there..

I would advise adding 20% to your budget as contingency for the unexpected and make sure you're not going to have any moisture seepage issues before building everything out.. Heard a lot of issues about that in basement units.. CHeck to make sure it's legal also, unless you're going to do it either way!

Overall. looks like good income though! Good luck!