All Forum Posts by: Osazee Edebiri

Hi Oakland /Bay Area friends -

I'm a somewhat newbie to investing having gotten my start late in 2020 investing out of state in my hometown back in TN. I sometimes feel like I'm on an island and would love to form a small group of "co-workers" who would enjoy the occasional get together / coffee / brainstorming so we can help each other move to the next level. I don't have any friends doing what I'm doing and have young kids so my growth is distracted/delayed by all the things.

I live in Oakland and would love to meet others in the Castro Valley to Berkeley radius to keep it easy for us all. Please let me know if you are interested!

Hi Eva,

I am in San Jose, but I probably spend half of my time helping clients in the Oakland area, as well as I was born and raised in the East Bay.

If you go to meetup.com you can look up the events that are already in your area.
Here are a couple:

THE BARSTOOL INVESTOR

The David Greene Team NorCal - Real Estate Networking Event, Wednesday, March 15 · 6–8 PM - Calicraft Brewing | Outdoor Patio Tables
2700 Mitchell Dr, Walnut Creek, CA 94598Hope this helps.

0 Votes

Oakland, California

Quote from @Account Closed:

@Osazee Edebiri Thank you for your response! It's definitely alluring that investing in the suburbs may have higher rental yields and less competition. The doctor recently told me that he saw the news that 'Mortgage loans' are hitting a 29-year low, and that the real estate market is frozen. He also told me that it's now, real estate doesn't seem like a good investment because, he said, 'people can't seem to make big money in real estate, and he thinks there needs to be something new.'

I learned from the answers and my learning that this isn't accurate and that real estate is still a great way to build wealth, but it's a boom and bust cycle. By being a dentist, one might be able to qualify for more mortgage loans and etc, but I still don't think that spending 4 years of extreme studying will take away my chances of gaining experience and entering the market early.

I'm definitely amazed by the fact that you're house hacking in San Jose, where home prices are very expensive. By house hacking in that area, do you live in one of the units for at least a year to sell, and if so, can you cash flow in that area, break even, or reduce the mortgage payment? I know that if you live in one of the units while house hacking, the cash flow gets reduced significantly, but can still have cash flow.

Thank you for the response!

To the doctor, certainly there are other investment strategies, but real estate is clearly a consistent choice since the establishment of our country.

As far as house hacking you can set it up many ways, but the one I have in San Jose is a SFH. I am out of pocket about $700 a month currently, when I move to the next one I will cash flow about $700 to $1000 a month.

1 Vote

Quote from @Marcus Marsall:

Hello everyone,

I am a real estate investor based in Northern California, and I'm seeking advice and mentorship on employing the BRRRR investment strategy in Northern CA. I have some experience in real estate investing, having purchased a duplex in the Bay Area as a house hack... now we have invested in a property in Sonoma that we currently occupy. Life has moved fast and I now have two kids which has lead to my wife and I looking to pivot with our original FHA/house hacking plan.

We've purchased our properties over the last 18 months with little money down. I don't see anything we can leverage with our current properties, and our remaining cash is for reserves. I'm now looking to learn how to purchase properties using hard money or seller financing, and I'm wondering what needs to be in place to make that happen. I'm also curious about which specific cities in Northern California are good for BRRRR investing, and where I should focus my research. I've heard both sides of the coin regarding BRRRR in Northern CA and really just looking to network, discuss and really just take our first couple of steps towards action. I'm looking to figure out ways to make this work close to home (wine country).

Would love to hear any insights from the community. I'm hoping this post gets decent traction. I love my state, and really want ot stay close to home. Of course, if there are others out there reading this, please feel free to interact with your thoughts and expereinces. If you have experience with BRRRR investing, especially in Northern California; any connections/references for those who can be considered for the BRRRR team; or even you yourself being interested in talking regarding these goals... Please let me know!

Hey Marcus!

Congratulations on your successful real estate investing so far and for seeking out advice and mentorship to further your BRRRR investment strategy in Northern California! It's great to hear that you're looking to stay close to home in wine country, and I can definitely offer some insights and suggestions.

Firstly, regarding purchasing properties using hard money or seller financing, it's important to have a solid understanding of the terms and conditions of these types of financing. Hard money loans typically have high interest rates and short repayment periods, so you'll want to make sure that the investment property you're looking at has enough potential for profit to make up for these costs. Seller financing can be a good option if you find a motivated seller who is willing to work with you on the terms, but it's important to make sure that the agreement is legally sound and favorable to both parties.

In terms of specific cities in Northern California for BRRRR investing, some areas that you may want to consider include Sacramento, Stockton, and Modesto. These cities have lower median home prices compared to the Bay Area, making it more feasible to find properties with good potential for value-add renovation and rental income. Of course, it's important to do your own research and due diligence on any potential investment property, regardless of location.

As for networking and finding a BRRRR team, there are a few resources that you can look into. Local real estate investor associations and meetup groups can be a great way to meet other investors and professionals in the industry. You can also consider working with a real estate agent who has experience with investment properties and can help connect you with other professionals such as contractors, property managers, and lenders.

Overall, it sounds like you're on the right track and have a solid foundation to build on. Best of luck with your BRRRR investing journey!

4 Votes

San Francisco, California

Quote from @Account Closed:

I'm a 19-year-old college student in Fort Lauderdale, Florida. I recently talked to a doctor who is aspiring to live in Manhattan, New York about real estate.

When I asked him about how I wanted to start investing in real estate in places like Texas, Florida, or Tennessee, he told me that there are lots of problems with investing in these non-cities. Instead, I should strive to go to Manhattan after becoming a dentist. Here are some things he mentioned that make investing not possible in these non-city states:

1. Houses NEVER sell in the suburbs. You have to wait 2 years for houses to sell at the very least.

2. Houses don't appreciate. You will pay a lot of property tax, but your house won't appreciate that much.

3. It's better to invest in a condo in Manhattan, New York than get several houses in the non-cities. (Less work for good condos in Manhattan)

4. If the contractors and the workers get injured when renovating or flipping a house, I will be responsible for all their medical bills. Yikes!

5. It takes too long to renovate houses. (More than 1 year)

6. You won't get a lot of mortgages approved, and will hit your limit.

7. Stuff breaks too much in traditional houses, and the landlord usually pays for electricity, water, garden maintenance, etc. Condos in Manhattan sell like hotcakes.

In sum, he told me why on earth would I go to the suburbs for real estate when I can just buy a condo in New York, have it appreciate a whole lot, and sell it for a way higher price? Although I would be paying more tax in New York, houses appreciate a hell of a lot faster and sell faster. If I invest in the suburbs, I will end up with non-appreciating houses in Texas or Florida, have to fix things all the time, and never be able to sell a house quickly enough.

I read a few books by Brandon Turner, Josh Dorkin, David Greene, JL Collins, and other authors, and it seems like a lot of people I know make a lot of money by investing in the suburbs, but does anyone have the information they would like to share on his views?

Keep in mind that this person I talked to believes that the only 'city' in the US is Manhattan or perhaps Los Angels in California. He thinks that other states like Florida, Texas, and Virginia are all the countryside with not a lot of big buildings where things are very very far apart. He made me think a little hesitant about pursuing real estate investing in the Suburbs, and I would like to know more about this situation!

I'm open to any feedback or criticism!

Hi Peter,

Let me start off by saying, I am glad you decided to post your experience and questions on this platform where there are numerous actual investors able to provide legitimate advice.

Your Doctor friend, sounds like the don't do any research, which scares me on how they potentially practice medicine.

The simple answer to your question is you can invest anywhere, it's really all about what investment strategy works best for you.

The longer answer. It's important to consider multiple perspectives and do your own research before making investment decisions. While investing in Manhattan real estate may be a lucrative option, it's not the only option available. Investing in real estate in suburban areas or non-city states can still be profitable if done correctly. It's important to consider factors such as local market conditions, property values, rental demand, and potential for appreciation before making a decision.

It's also important to note that investing in real estate, like any investment, carries some level of risk. While there may be some drawbacks to investing in suburban or non-city real estate, there are also potential benefits, such as lower purchase prices, higher rental yields, and less competition from other investors.

Ultimately, it's up to you to weigh the pros and cons of investing in different types of real estate and make an informed decision that aligns with your goals and financial situation. It may be helpful to consult with a financial advisor or real estate professional who can provide guidance and insights into the local market conditions.

Lastly to provide personal example. I Househack in San Jose, which is a suburb of the San Francisco Bay Area. We have seen tremendous appreciation especially when work from home became a thing because people that typically wanted to own homes in the city of San Francisco decided they could get more bang for there buck in the more affordable suburbs of the Bay Area like San Jose, as well as acquire more space for home offices, etc. Now keep in mind home prices are in relative, San Jose is still more expensive than most markets in the country, but it is less than San Francisco, which has the highest number of Billionaires living in it in the country.

1 Vote

Quote from @Bruce Woodruff:

Quote from @Osazee Edebiri:

Quote from @Bruce Woodruff:

Quote from @Lauren Kormylo:

My apologies. Arizona is far better than most other states. I moved here partially because of the overall business climate.

I think everywhere has it's up and downs. People love Texas, but when they move there, they find out taxes are high. Phoenix is cool, but it's also hot as heck (see what I did there). I personally try to avoid pedestaling any city or state because I have seen enough of the country to know everywhere has ups and downs, so it's always about what works for the individual.

You are correct sir, there are differences between every area. Some of the political differences are more important though, because they can have so much control over people's lives and livelihoods.....

True, the politics matters everywhere. I am still keeping an eye out for a city/state that I think is higher on the see-saw than others.

1 Vote

Seattle, Washington

Quote from @Bruce Woodruff:

Quote from @Lauren Kormylo:

My apologies. Arizona is far better than most other states. I moved here partially because of the overall business climate.

0 Votes

Seattle, Washington

Quote from @Jarrid Weber:

Hello BP Fam,

My lady and I own a rental in Moreno Valley, CA that we are in a dilemma of hold or sell - and I am hoping for some guidance or insight!

We currently owe $266k on the loan and the property is worth between $460k - $480k. It was built in 1980 and will need a new roof in the coming years. The monthly payment is $1,600 at 4.5% interest.

The property has been rented for two years, and before that, it was our primary home for many years. As such, we could benefit from the capital gains exception if we sell.

While it’s been rented for the past few years, it hasn’t been profitable because we had some large repairs to make (A/C change out, plumbing issues, etc.) that ate up everything we earned.

Since I am in the process of re-marketing for new tenants, I'm going to increase rent to market rent at $2,500 a month, which will provide a cash flow of $700 with Property Management (no including CAP EX, etc.).

My question to you all, do you continue renting and take the $700 with the expectation of future repairs, or take the $170k in profit and re-invest elsewhere?

Based on the information you provided Jarrid, it appears that you have a few different options to consider when it comes to your rental property in Moreno Valley, CA. Here are a few things to keep in mind as you weigh your options:

Consider the potential for future repairs: You mentioned that the property will need a new roof in the coming years, which is a significant expense. It's important to factor in these kinds of potential repairs when making your decision. If you sell the property now, you won't have to worry about these expenses, but if you hold onto the property, you'll need to budget for them.
Think about your long-term investment strategy: Are you looking to build long-term wealth through real estate, or are you more interested in making a quick profit? This will likely impact your decision. If you're in it for the long haul, holding onto the property and building equity over time could be a good strategy. If you're more interested in cashing out and reinvesting elsewhere, selling might be the better option.
Weigh the potential for future appreciation: Real estate prices can fluctuate, and it's impossible to predict the future. However, if the property has been appreciating in value over the past few years, there's a chance it could continue to do so. If you hold onto the property, you may be able to sell it for even more down the road. On the other hand, if you sell now, you'll lock in your profit and won't have to worry about potential dips in the market.

Ultimately, the decision to hold onto your rental property or sell it depends on your specific financial goals and circumstances. This appears to be a stable investment, do you have other ones or other means to scale your RE? If this is your only investment it may be risky to sell something that is working to look for something else that you have to make work. On the other hand if you have some other investment or investments to fallback on, then it is likely worth the risk to improve your return on investment.

Some of could just come down to how risk adverse you are and how much effort you are willing to put in to scale your return on investment.

1 Vote

Quote from @Justin Moy:

A new kind of tenant has been on the rise in the US, according to a recent analysis by RentCafe. More than 2.6 million high earners are choosing to rent rather than buy their homes, giving rise to the "millionaire renter". The report reveals that the number of renter households earning over $1 million has tripled since 2015, reaching a record high of 3,381 in 2020.

Historically, cash for a downpayment has been cited as the #1 reason people didn’t pursue homeownership, but we’ve began to see a larger group of individuals in younger generations opt to rent even with more than enough cash available to finance home purchases.

Who are the millionaire renters?

The analysis shows that millennials make up the largest group of millionaire renters, accounting for 28% of the category, followed by Gen X at 23%. Surprisingly, even though they have the financial resources to own homes, millionaire millennials and Gen Xers are opting to rent instead. The mindset of lifestyle renting has become more popular among the younger generations, and it seems that it's not just a passing trend.

Where are they located?

The millionaire renters are most concentrated on the West and East Coasts, particularly in California, New York, and Washington, D.C. San Francisco saw the biggest uptick in this demographic between 2015 and 2020, with rentals populated by millionaires ticking up by a whopping 1,629%. Los Angeles experienced a 361% increase over the same period.

In addition, the number of renters with annual incomes of over $150,000 grew by 82% nationally between 2015 and 2020, with Seattle, Portland, and Miami leading the pack for this metric.

Conclusion

The RentCafe analysis has revealed some interesting insights into the millionaire renter phenomenon. It seems that for many high earners, lifestyle renting is a better choice than owning a home. This trend has been driven by a combination of factors, including changing attitudes towards homeownership, and the increasing popularity of renting among younger generations. As the number of millionaire renters continues to grow, it will be fascinating to see how the rental market evolves to cater to this new kind of tenant.

Interesting topic @Justin Moy . @Erik Estrada @Bill B.@Darius Ogloza all spot on points to the subject.

Being a Bay Area area resident I have had several conversations with people that fall in these categories as millennials and younger with high incomes. Aside from points stated, I have found that many are scared of the thought of being tied down. Many state they may have to move across the country from their continued high income work. Or uncertainty in how their lives will go with relationship partners. Lastly, many talk of the investment, so how they are making money off their money. Especially, here in the Bay where tech is such a huge proponate, all of them look a stocks / crypto and try or feel they are experts in those investing platforms. It's an easier thought process for them to play/manage their potential wealth generation on a tech based platform, where again they feel less tied down and that they have more control. I would say that real estate is the more proven investing method, but as you all said with the numbers the way they are, it's a lot easier for these groups to emotionally feel they are taking less risk if their rent is substantially less than a mortgage payment would be.

3 Votes

Quote from @Akshar Puri:

Hi BP community - my name is Akshar and I am a new investor hoping to close my first deal this year.

My background: I have worked in the hedge fund industry for over 4 years, and am now trying to diversify some of my wealth into real estate. I am most interested in running a buy-and-hold strategy, but I am unsure of whether I should start investing out of state, or in the area in and around the Bay Area. My main objective is to buy properties (preferably SFH for my first deal) with strong cash flow (looking for 6%+ cash on cash return), with some appreciation on top, which I know is challenging in the Bay Area. However, traveling long distances to buy and rehab properties out of state can be very time consuming, which is a large con for me given my very very busy schedule.

I would love to connect with other investors located in the Bay Area, and am hoping to find some local REIA networking groups/meet ups (please let me know if you are aware of any!) I have been on BP for a few months, and I hoping to learn from other investors, find a mentor, and network!

Looking forward to being a part of the BP community, and getting to know other investors!

Hey Akshar,

Welcome to BP Community. I am here, also in San Jose. I house hack as well as have multifamily property. I like that you have specifics to your goals and understand what is important to you, which based on what you mentioned is not spending a lot of time on this because of your current busy schedule.

I think 6% is doable, here in the depending what your cash outlay looks like for the property you purchase and how you structure the deal. Have you already looking into what types of properties interest you here verse potential properties OOS?

0 Votes

San Jose, California

All Forum Posts by: Osazee Edebiri

Osazee Edebiri has started 15 posts and replied 315 times.

Post: Highest YoY Appreciating MSA Markets vs Lowest YoY Appreciating MSA Markets.

Post: Looking to Network with likeminded early investors

Post: The BIG problem with buying/selling houses in the suburbs!

Post: BRRRR Northern California Advice

Post: The BIG problem with buying/selling houses in the suburbs!

Post: What fees do your guests get hit with? Seattle 30 percent!!!

Post: What fees do your guests get hit with? Seattle 30 percent!!!

Post: Hold or Sell Rental

Post: The Rise of Millionaire Renters in the US

Post: New Investor in the Bay Area

Osazee Edebiri has started 15 posts and replied 315 times.

Biggerpockets Logo Post: Highest YoY Appreciating MSA Markets vs Lowest YoY Appreciating MSA Markets.

Biggerpockets Logo Post: Looking to Network with likeminded early investors

Biggerpockets Logo Post: The BIG problem with buying/selling houses in the suburbs!

Biggerpockets Logo Post: BRRRR Northern California Advice

Biggerpockets Logo Post: The BIG problem with buying/selling houses in the suburbs!

Biggerpockets Logo Post: What fees do your guests get hit with? Seattle 30 percent!!!

Biggerpockets Logo Post: What fees do your guests get hit with? Seattle 30 percent!!!

Biggerpockets Logo Post: Hold or Sell Rental

Biggerpockets Logo Post: The Rise of Millionaire Renters in the US

Biggerpockets Logo Post: New Investor in the Bay Area

Post: Highest YoY Appreciating MSA Markets vs Lowest YoY Appreciating MSA Markets.

Post: Looking to Network with likeminded early investors

Post: The BIG problem with buying/selling houses in the suburbs!

Post: BRRRR Northern California Advice

Post: The BIG problem with buying/selling houses in the suburbs!

Post: What fees do your guests get hit with? Seattle 30 percent!!!

Post: What fees do your guests get hit with? Seattle 30 percent!!!

Post: Hold or Sell Rental

Post: The Rise of Millionaire Renters in the US

Post: New Investor in the Bay Area