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All Forum Posts by: Matt K.

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

Post: [Possible Stupid Question] Renting the house vs renting rooms

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

For bay area, you're not factoring in the appreciation that's what offsets you're negative cash flow on the backend. But it's a gamble, could work, could not, most likely won't be how you expected lol.

Renting rooms might make more money, but again different challenges. You're not getting the same kind of tenants, you'll have more potential for turnover, and probably going to be having more overhead as everything would be likely rolled into the rent.

Bay area is hyper local, location and property type are everything. A 3/1 in good school district would work, that same 3/1 in a fun spot with terrible schools wouldn't work nearly as well and likely see lower rent.

If you're going cash flow each month, go out of state. If you're going appreciation hard to beat bay area $ because of the price points IF and I repeat IF you can truly afford to run the property long term.

Post: Newbies who need to get started but don't know HOW

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

I'd help out, but you'll attract quality people if you can put together a group where the different people are good at something that compliments the end goal of a group.

CA is a rough to break into, out of state is easier from a financial standpoint but has it challenges and different set of risk/rewards. Happy to share my experience locally and out of state, let me know how it goes setting up the group

Post: Is it still worth investing in condominiums?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

I'd pass on most downtown and even the burbs. I've seen a few that worked before prices went out of control, but they were the exception before everyone had so much cash to throw around.

Lately all the ones I have seen that come close to penciling out had rental restrictions and either required board approval to convert into rental or didn't allow it but potentially could if you cleared a waiting list.

Now, with that said townhouses or half duplex can work if you're lucky and right place right time haha 

Post: CA Real Estate License School Feedback

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Scott Saling:

Hello Everyone... I'm a newbie from Oakley, CA working on a few ventures to raise capital. I'm also planning on getting my license and was curious if anyone has advice on the best path; specific schools, brokers who will sponsor, etc. ...appreciate any and all feedback. Thank you! 

Real Estate Express for the courses, prep agent for the exam.

Granted I've been around this a long time before even thinking about getting licensed, but I had a opening come up last second for the exam and did a cram with prep agent podcasts and was able to pass the exam following day.

Prep agent makes dry material at least engaging....and easy to digest in chunks

Post: Current Mortgage Rates

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

If the deal works with these numbers, it'll work even better if rates ever come back down all you gotta do is refi.

Word of caution though, don't fudge the numbers to make them work...let them tell you what could happen. I like to use a range with worst case being on the low side and best case being the high side. But even then I'm conservative (yet realistic) on the rents and price out repairs with mix of cash and credit. It's easy to get new water heater for example interest free for year +...make the monthly keep the bulk in you operating account.

Post: Earning 100k vs borrowing 100k?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Anthony Cole:

I'd like to propose a simple question. If you have the ability to source investment capital regularly at a realistic interest rate, let's say 7% APR. Is it wiser to borrow the money rather than 'earn' the money traditionally in which you pay 30% income, federal, state, etc. tax on? I realize this is a loaded question and want to keep it fairly surface level to invite as many opinions on this as possible!

For me, it's about speed and opportunity cost. I have a steady source of income, easily predictable but slow.... So borrowing money makes more sense then me saving up the full amount.

The amount of time it'd take me to save up 100k vs borrowing home prices going to outpace me at a rate I would never be able to match. I'd be sitting on the sidelines forever and fight that almost there feeling which would likely wear down the logical approach and let the emotional response kick in heavier.

Post: Should I invite them to lease or should I hold out?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Dong Shi:
Quote from @Matt K.:

You should probably revaluate your tenant criteria. 200k+ and perfect credit, they're either buying or renting something nicer.

3500 mo, that's generically speaking 125-150k yr to qualify for rental based off income. They would have a hard time buying something with what prices are now.

I would also strongly understand what's causing lower credit scores too. Medial Bills, Student Loans can tank a score, but could mean they care more about housing then those things...

But where you're likely at would be by the room, get people in there at 1k mo utilities included. That's probably a competitive price these days more so with the quality of your unit...and those renters aren't going to care about you being onsite since they're already used to sharing space since they rent roomm.


 Yeaaa. So this is what I'm having trouble with. I know the city in general has a poorer, more troubled demographic, so the general renter population will be worse. However, it's the property is in the Hayward Highlands, so the neighbors in the immediate vicinity are pretty well-off (You see porsches and teslas driving down the road in the neighborhood pretty often, and lots of the neighbors were successful managers, executives, successful contractors etc in their careers). It's also a much safer neighborhood than down in the flatlands. So I'm a bit at a cross-roads in terms of what to do, to wait for a high-quality tenant or to work with what I've got.


 None of that tells you anything about the people in those homes or vehicles. It's easy to get a car loan, you wouldn't know if they have a 20% apr loan or paid it all cash. You'd also never know if they're a 600 credit score or an 800.

But generally speaking, a family is going to want that many rooms...and a family will likely value schools more so then a nice property.

Family with no kids, unlikely to "value" the high bedroom count...and would likely want less rooms that are bigger.

Your property is nice, but look at it from a renters perspective. What makes it more valuable or desirable then your competition. 

With people returning to work and school, you could probably do well renting out the rooms... Look at how much rooms are going for, they're way up in the East Bay toward Walnut Creek. 1k room is affordable compared to 12-1500+ for a 1bd room plus your property probably nicer.

or since it's furnished, throw it up on furnished finder or do short term rental (but make sure you account for proper insurance).

You could also likely rewrite the ad, sell it that ad would turn me and most people I know away because it's too formal and not welcoming/selling me the dream lol

Post: Should I invite them to lease or should I hold out?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920

You should probably revaluate your tenant criteria. 200k+ and perfect credit, they're either buying or renting something nicer.

3500 mo, that's generically speaking 125-150k yr to qualify for rental based off income. They would have a hard time buying something with what prices are now.

I would also strongly understand what's causing lower credit scores too. Medial Bills, Student Loans can tank a score, but could mean they care more about housing then those things...

But where you're likely at would be by the room, get people in there at 1k mo utilities included. That's probably a competitive price these days more so with the quality of your unit...and those renters aren't going to care about you being onsite since they're already used to sharing space since they rent roomm.

Post: Rehab Costs for SF Bay Area?

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Stephen Swanson:

Hi Bigger Pockets peeps, I'm new to flipping and I know a big part of it is estimating rehab costs.   I'm targeting East Bay suburban, SFHs under $1M before renovation.

I've read the book "Estimating Rehab Costs" by J. Scott, and watched recent videos from Bay Area flippers.  It seems the "average" flip construction costs are running $50-$100 sq. ft., if hiring a GC, and assuming no issues like structural or foundation repairs (which I wouldn't touch anyway), and not a high-end flip.

Ifs anyone is willing to share advice, especially some relevant line item contractor bids, that would be a tremendous help.  Thanks!


 Did you drop a zero? I don't see how you're anywhere close to 50-100 sqft unless we're talking about something different.

Labor/materials has skyrocketed over the last 2 years and no slowing down. You're going to be paying more on top of this unless you have existing relationship or bigger job. No one going to take small jobs and the good ones going to be booked up, but a profitable job can get you bumped up on schedule (sometimes).

You are also competing against DESPERATE home buyers with loads of cash to throw around coming from other parts of the bay who aren't afraid to "overspend" that'd likely zap a reasonable profit.

Post: [Early Plan] Guidance on 1031 Exchange and Eventual Relocation

Matt K.Posted
  • Walnut Creek, CA
  • Posts 3,970
  • Votes 2,920
Quote from @Lex Douvas:

Hi BP - I had a bit of an early stage 1031 exchange question I was hoping to seek the collective wisdom of this group on. 

Context: I have an investment property in CA which I'm going to be 1031'ing into a property in Hawaii. Long-term, the hope is to relocate to Hawaii full-time. We're trying to line the moves up such that we have an easy landing and take maximum advantage of tax shelters. 

Our current plan: is early stage, but I was thinking of sequencing it as: 

(1) Sell the current property (we have an offer that we are in the process of countering)

(2) Find a single family home or townhome to 1031 into. I need to run more analysis on which one would actually be more likely to cashflow. 

(3) Rent the 1031'd property for 2-3 years. 

(4) Relocate to the 1031 property and swap it to a primary residence. 

(5A) If we are happy with the 1031'd property as a primary, turn our (now) former primary residence into a rental, then continue with 1031'ing from there. OR

(5B) If we aren't happy with the 1031'd property as a primary, sell our (now) former primary residence to use the 2-yr capital gains tax shelter, take proceeds from that to buy a new primary. Turn the 1031'd property back into a rental once we have the new primary (and/or sell it and take the tax hit at that point). 


In all cases, we're specifically targeting using the 1031 as a landing pad for when we eventually take the plunge. We've got 2 kidos and pups so the barrier to actually moving if we don't have a place to land (that's pet friendly, etc) are high enough that we'd probably never end up doing it. Because it's partially an investment plan, partially a life plan I'm willing to accept less of a profit on the investment property (I want it to at least break even, but we'll try hard to find one that's cashflow positive still). 

My question to this group -- given the long-term plan of relocating, did I miss any options? Is there a simpler route (other than just doing a mid-term rental)? Any guidance or steers very welcome, including the brutally honest ones, many thanks for your time! 


 Do you have a QI already? If not you're going to need one anyways and they can go over lot of this.

1031 rules in general can be interpreted differently depending on your risk appetite, but a lot comes down to intent.

If you need a intro, I can help and share my experience of how I handled a similar situation... Message me