All Forum Posts by: Matt K.

They're very different outside a spreadsheet...the other areas are more deseriable and would have less risk of decline and more potential of higher appreciation.

But again, arguing a market vs a specific property is kind of pointless. The simple point is OP has a good chunk of equity that he can either let sit and cash out later or redploy to something else. His property/market isn't a unicorn and singnifcantly outperforming anything, the returns could easily be matched or beat in plenty of other areas.

Or let it sit...

And if you (or anyone else) wants a market report from CCAR (local MLS) happy to email it you ... As an alternate data source to Zillow.

0 Votes

Oakland, California

Quote from @Trish Mccoy:

I don't use any Software except excel spread sheet that I tailored to my properties.... But I am interested in knowing what other use and why. :)

Mind sharing the spreadsheet, I'm terrible at excel but always curious about stuff other people come up with.

0 Votes

Quote from @Carlos Ptriawan:

Quote from @Matt K.:

Quote from @Carlos Ptriawan:

Quote from @Patrick Thomas Dickinson:

d worth about 700K, loan payoff is 455k should sell fairly quickly i would think, with rates being higher (probably above 6 % for investment property) and my rate in brentwood being 3.38 Im thinking its better to hold and rent. The property currently cashflows about 300$ a month.

>>
Brentwood would be a 1 mil property 5-6 years from now as it's the only "good neighborhood yet affordable" in North/East bay area.

Unless you will move to KC no need to buy in KC. A good comparison to KC around Bay Area is Stockton, the current 2022 price is $450k from $120k in 2013; hypothetically you could still get cash flow and appreciation in NorCal if you invest at the same time.

Brentwood doesn't see the crazy appreciation as other places because it's main value proposition is being affordable...Walnut Creek, Pleasant Hill, Concord, and parts of Martinez would be more likely to hold their value as they're more desirable then Brentwood... especially with people moving from the South bay.

Here is a random example from Brentwood
922 Oxford Ln Brentwood, CA 94513
Sold for 225k in 2010
401 in 2017 (+~90%) And was listed for 650 July of this year, still not sold and reduced down to 625 (+~30%) ... Any bets on what it'll actually sell for?

Compared to this random example from WC 1582 Siskiyou DrWalnut Creek, CA 94598 it gets absolutely crushed on a similar time frame.

Also,

Stockton isn't like KC at all aside from prices, they're worlds different. KC and the suburbs have pretty diverse employment with mix of emerging tech, corp headquarters, government, and lot of logistical jobs.

Stockton would be more similar to Saint Louis where people are leaving for something else....

Correction. I always use statistic when comparing.

Here's the data of avg house from 2013 to 2022:

brentwood 321k --> 936k
wc 447k --> 1.12m

So brentwood appreciation is almost 3x ; walnut creek appreciation is only 2.5x. In both cities, you made ~600k

Why I bring Stockton to picture is to show to you that if you invest in Stockton,CA or KC in 2013, in both city you could still get cashflow but Stockton appreciates way more than KC after almost 9 years.

This is to demonstate, that when the core of the region/metro has experienced economic booming, the periphery of the region is also experiencing the same and house appreciation. And all of these happening while population is actually .... decreasing.

What's an average house? There's some seriously expensive and huge houses in Brentwood that'd prop up the numbers and wouldn't apply or be anything close to what OP has because they're either new construction or huge estate/ranch.

OP said himself his house is about 700, but you claiming the average house in Brentwood is 900+? Why not refine your average to homes more similar to OPs?

0 Votes

Oakland, California

I'd pause on anything with a HOA, lot of hate directed at STR right now in KC....so I would expect HOAs to take a tougher stance and either add in a ban or enforcement of existing bans.

0 Votes

Kansas City, Missouri

Quote from @Carlos Ptriawan:

Quote from @Patrick Thomas Dickinson:

Compared to this random example from WC 1582 Siskiyou DrWalnut Creek, CA 94598 it gets absolutely crushed on a similar time frame.

Also,

0 Votes

Oakland, California

Quote from @Bud Gaffney:

@Patrick Thomas Dickinson keep it. Borrow against it. Keep it rolling :)

How does this make sense? He's getting 250 mo cash flow....

He's got 200k or so in equity, so his LTV is probably high.... And he doesn't want to increase his interest rate.

Even if he was to borrow that 200k (but can't because no one doing a 2nd position loan at 100% LTV) and if he got a stupid low rate .... it'd kill his cash flow and he'd be negative 500+ mo with zero equity in the property....and market goes down he's underwater on that property.

And then you have the fact he no longer gets a 121 exemption...so if he doesn't do a 1031 he's going to pay capital gains and depreciation recapture.... That's most likely going to wipe out any appreciation for years to come.

0 Votes

Oakland, California

Quote from @Patrick Thomas Dickinson:

@Alex Olson I would love to see those case studies. Can you plug 6 to 7 percent investor mortgage rates into those, im sure those were underwriten with lower rates sub 4.5. I know you can make money in a lot of places and that is why I own property in other states but my point is simple appreciation although not gauranteed is the true wealth builder, cashflow is good but it doesn’t really change your life heavily, unless your seeing a lot of it. Rents in California have almost doubled in the last 10 years, places like Kansas texas , the Midwest generally speaking don’t have the highest paying jobs, you can only charge what people can afford to pay and in California especially metro areas that is a high number especially with a population of 40 million and a housing shortage. Drive down one of our freeways during traffic time and tell me we don’t have a population issue. This a long term play for me and although I can’t predict the future I have to look what things have done in the past. I would love to see your thoughts on Kansas though please send

What is your exit plan? You may have decent equity, you probably would get more equity over the years if you hold... but without an exit plan, it could make less sense than you are picturing. Depreciation recapture and Capital Gains tax going to eat up a significant chunk of your future appreciation .... unless you redeploy that capital. But that's the trap, your property goes up, and the replacement property likely goes up as well... if it comes w/ existing tenants depending on where it can be hard to get them to market rent. I phrase it like this because, you make money when you buy.... and buying a property from a seller that has below market rents, likely would result in you buying it below market rates as well.

Also, for clarification KC is by no means the only place to make money... but it is one place I know well and can easily compare it against the east bay which I know well also because I live here.

If you're up to it, post a bit more detail about the property you're looking at getting rid of and that could help others give you better scenarios of what a replacement could look like...

My strategy is simple: Build wealth through a primary home in CA (so I can use the 121 exemption+ 1031 if needed), and use OOS rentals to reduce my cost of living in CA (mostly by paying the mortgage of my primary). This allows me to have a backup property to move into if CA/Economy tanks, but also spreads out my exit strategy on rentals across the properties so I can have multiple exit strategies instead of everything being tied up in a high-value single property....

1 Vote

Oakland, California

Quote from @Patrick Thomas Dickinson:

@Matt K.

I hear what your saying I own property in Texas as well where homes are 1/2 to 1/3 the price of my California properties. Raising the rent 100$ dollars on someone in Texas is a big deal and probably in Kansas as well. Raising the rent in the Bay Area that much most people don’t bat and eye and if they do 10 more people are applying for your property after the old tenant vacated. I see that you might be from Walnut Creek or have lived there at some point so you probably understand me my local market. You seem to be very pro cash flow which I understand because we all like money but I think California has made way more millionaires in real estate than Kansas City mostly because of appreciation, I know it’s not gauranteed but seems to be pretty reliable if you look at history, I mean just go ask your 70+ year old neigbor what they paid for there house 45 years ago. This is a long term decision for me. It seems like true wealth is build from appreciation not a couple hundred dollars of cash flow every month at least that my two cents.

The KC properties still appreciated in my example, quite a bit. They just didn't appreciate as much as bay area because their purchase prices were so much lower.

To me the biggest risk is being able to manage a property as a landlord in a way that reduces risk to me. Part of that is doing back ground checks, look up how restricted you are as a landlord in Oakland when doing that.

Rent increases are similar...if you have a long term tenant who is significantly below market you are limited to how much you can increase rent in CA, plenty of other states you can get to market rents easier and faster.

I get the appreciation play, but again the main way to use that equity is to a) sell it or b) borrow against it. So if get appreciation it's great, but it also means you're either going to pay higher prices when you sell/replace (1031) or go negative if you borrow heavily against it.

Now, if we're talking a about a primary residence entirely different Convo because you have much different options...that's where I feel the CA property makes sense and is a huge boost to wealth. Plus you avoid much of the risk and lower costs etc compared to other states. Prop 13 is pretty powerful still and I'd be surprised if that has a radical change anytime soon...

1 Vote

Oakland, California

Quote from @Patrick Thomas Dickinson:

@Allen Wu cash flowing like 250$ and interest rate on ca property is 3.38 my intuition is telling me to hold the property because rents will probably go up significantly over the years and my chance of appreciation is probably higher in sf Bay Area. Im just trying to get some ideas of what others might do if they were in my situation. I want to go larger multifamily or commercial one day but with the rates going up it might be better for me to wait for wait for rates to drop and 1031 exchange later

Rents going up though isn't exclusive to the bay area, that's a nation wide thing right now...

I agree appreciation is higher (dollars wise) here but there's also other places seeing hefty appreciation but on a percentage basis.

Certain places here make it really hard to raise rents on existing tenants and next to impossible to screen in a meaningful way...and then worse case an eviction you're going to be in for more then a headache.

For context, a KC property I'm familiar with has nearly doubled in price over 6 years (175k to close to 350k today). Rents were 1600 or so, then close to 2k. Airbnb potential puts that property close to 4500 mo rents (2500 mo to fully operate).

Another one is a duplex at like 115/side about 4 years ago... Below market rents at 2300 mo worth probably closer to 150/side and 26-2700 mo market rent.

Still landlord friendly, fair restrictions on background checks, and evictions aren't impossible nor mandatory payments to tenants...

1 Vote

Oakland, California

200k gets you something in the Midwest paid off... Or close to it and a small loan. It should get you close to 2k mo in rent as well...but in MUCH more landlord friendly environment.

Put a HELOC on it then you have a decent war chest if property values drop or you come across more deals.

CA has become to anti landlord for it to make sense to me at least, but fantastic for primary for the foreseeable future.

Happy to go over numbers if you want and share my experience in Kansas City MO...

6 Votes

Oakland, California

All Forum Posts by: Matt K.

Matt K. has started 11 posts and replied 3834 times.

Post: To Sell or Rent my house San Francisco Bay Area

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Post: To Sell or Rent my house San Francisco Bay Area

Post: Should I buy a condo & short term rent it out in KC?!

Post: To Sell or Rent my house San Francisco Bay Area

Post: To Sell or Rent my house San Francisco Bay Area

Post: To Sell or Rent my house San Francisco Bay Area

Post: To Sell or Rent my house San Francisco Bay Area

Post: To Sell or Rent my house San Francisco Bay Area

Post: To Sell or Rent my house San Francisco Bay Area