All Forum Posts by: Katrina Razavi

Hey @Shervin Esfahani, super interesting thread thanks for kicking it off. I've toyed w/ this idea (namely me and my husband were thinking there's likely some hotel to buy due to COVID) where you could do something like this. This BP episode actually made me think of that, check it out. Lots of good learnings and also interesting that he pulls this off in a hot market like Seattle. Not 100% what you're looking to do but lots of analogies. There are also a good number of startups trying to solve for this, here's one in SF and an article that has others that have raised. That said, I think there are smarter (and more profitable) ways to go about this that don't involve raising millions and getting diluted.

Happy to chat more and hear if this is something you're actively pursuing. I'm from SD and my family has many MF's there, so I'm pretty familiar w/ the market. I also do RE investing but currently, OOS. If so, shoot me a msg!

Renters insurance, pet fees and policies around pets and their responsibility to care for them, late payments and terms around that, ability (or not) to sublease or short-term rent the property are a few off the top of my head.

If the numbers work, the numbers work. You're either in the game, or you're on the sidelines. Although it's always great to feel like "you got a deal" we have to keep in mind that interest rates are at an all-time low and we're in a very unique situation. As others have pointed out, the government is going to continue printing money which means that people will still be able to make rental payments, and in some cases, buy homes. It also means that RE is a good place to "protect your money" as cash decreases in value. So getting ahead of this is probably the right move.

For the millions of folks who are in forbearance or can't make payments, I can't imagine a case where the government won't step in (in the same way Obama bailed out the big banks a few yrs back) so I'm not too worried about tenants not being able to make payments over the next 4 yrs. But no one has a crystal ball....

There seems to be a lot of movement within the immediate Bay Area i.e. SF city>>East Bay or Peninsula, hence the original post with the unimaginable number of offers. So although folks may be leaving the state, there's still solid demand and limited supply, and that tension is what dictates the local RE market and its prices, not one-off stories about folks packing up and heading to other states (which is happening, but it's clearly not impacting RE here). But there's an important question that hasn't been addressed about the reason why the Bay Area has been such a unique and strong market for the past ~10+ yrs. and it has to do with its main economic force that makes it desirable. The technology economy.

Why has the Bay Area been a tech hub (and likely continue to be one?)- 

The Bay area is a tech hub not just b/c big companies have massive HQ's here (Google, Apple, Facebook, etc) but b/c of the high quality universities that attract some of the smartest people in the country  (i.e. Stanford, UC Berkeley), the talent and research that occurs at these institutions is a strong incentive for these companies to still maintain a presence here. i.e. they have a great talent pool to hire from. Even if that presence reduces a bit, it definitely won't vanish.

In the same way that venture capital won't vanish from the Bay Area.  Will it become more accessible to those outside of the Bay Area? Likely (which is a good thing).

There are other cities like Austin, Boulder, Raleigh that have a bourgeoning tech scene for similar reasons, but it will take a while for them to establish themselves to a Bay area caliber.  For that reason, I'm not holding my breath on Miami becoming the next Silicon Valley. 

Welcome @Michael Dobbins! Agree w/ others' comments, the one piece of advice I'll add is that sometimes it's better to just get started even if it's not "perfect" to start building momentum. Otherwise you may end up waiting for an unnecessarily long time. For me, buying our current home was sort of like that. We looked for months, then realized the perfect property doesn't exist. We finally picked one and went for it and got over the fear of purchasing (and learned many lessons along the way) that we wouldn't have learned if we just kept renting. 

Sit down and run the #'s to determine how much money you can "afford" to lose and use that as a baseline to help guide your options. I'm not sure what your financial goals are, but I'd pick #1 b/c a) it cash flows when you leave b) desirable location where both property values and rents will likely appreciate faster. Good luck!

My philosophy is that you're either "in the game or you're on the sidelines." To @Rob Gillespie's point, you can always find a deal if you're willing to get creative (i.e. driving for dollars, networking w/ agents, etc). The best time to buy is usually now, and not in the future as prices will likely continue to go up. When looking at a longer time horizon say 5-10 yrs, there's a high likelihood that whatever RE investment you make, it will appreciate. Don't you wish you bought something in your neighborhood yrs back when prices were X thousand dollars lower? 

Run your #'s and so long as it makes sense and hits your objectives, I'd go for it, even if you think that it sounds expensive. The other thing to note is that interest rates are at historical lows (hence why folks are buying a lot), but being able to lock in a 30 yr rate at 2.5-3.5% interest over 30 yrs is NOT a bad deal at all.

Hi Chad, the one part I'd call out is property management. I've spoken to countless fellow OOS investors who have given up on OOS investments b/c their property mgmt costs were way higher than expected and they went through numerous firms b/c they felt that they weren't trustworthy and/or nickel and diming them. 

In terms of going in on a 10-unit for your first deal, you'll likely get a variety of opinions. Me and my partner started w/ a duplex, then 4-plex and are now looking at a bigger # of doors know that we have our contacts down, processes and have gone through a bunch of lessons learned. That said, dont' let me discourage you, with the right grit, time and persistence, it's definitely possible and if the #'s make sense, the #'s make sense. 

Jumping off what others have said on this thread, perhaps you can JV w/ a local investor in that area who can go on-site if needed and take on the property mgmt aspect so that they also have "skin in the game" and aren't incentivized to overcharge.

Best of luck!

Welcome Kyle! It helps to get a bit specific about what you're looking for. Cleveland has its good and not-so-good neighborhoods so it just depends what you want to optimize for. I personally invest in Lakewood, OH and it works for us. It may not be as cash flow + as some of the other neighborhoods there, but it's typically A tenants who pay on time and are reliable. Given CLE has become a hot spot for investors, I'll bet you can find turnkey opportunities there or almost anywhere in CLE worth investing in. That said, one of the biggest challenges I constantly hear from fellow OOS investors is good and trustworthy property management, so definitely make it a priority to find good ones. Fortunately, we self-manage as we have family/friends who are local. Some neighborhoods to look at and consider IMO are Edgewater, Parma, and Lakewood

@Jim Truman same deal w/ dishwashers...

This is a great thread, b/c I thought the same before investing in Lakewood OH. One of our properties didn't have laundry and I was worried about not being able to rent the units there b/c tenants have to go to the laundromat. We've never had any issues finding tenants. Also, as an FYI washer/dryer can become a pain to maintain so also consider that. But long story short, I wouldn't be overly picky about those things. And +1 to the point of focusing on real value add where you can increase the value of the property itself vs. amenities that may not matter to your tenant pool