All Forum Posts by: Paul Merriwether

What would be the expected cost of the duplex? The taxes alone would be approx 1% of purchase + $1,450 local taxes. Lets not forget Oakland's moratorium on evictions!!! Plus you probably must pay that tenant to leave that could run into many thousands.  Then there is the actual cost of the unit & it's down payment. 

How about rethinking Oakland and buying out of the area in CA or out of state. Check foreclosure websites Hubzu, Auction-com,

realtytrac-com etc.  Your goal is to make money not stay in HUGE debt or have legal issues!!!

 There are townhouses you can buy out of state in the 50 - 60k range about 900 sqft. Built in the 90's that did cost only $25k 3- 4 yr's ago. Their rents were in the $500 - $600/mth. Two units could have mean an $800 cashflow if you aid cash. Plus possible appreciation. How much were you looking to put down on Oakland Duplex? I say forget Oakland ... think out of area. 

@Cory Carlson 

>> Buying, holding and hoping (appreciation) is not a real estate strategy. << 

We became Bay Area millionaires because of appreciation!!! 

>>  Take your lucky break in appreciation << 

Please take time to pull up 2621 78th Ave. 94605 A rental home I use to own. I purchased it in

1980 for $50,000 in a high crime area. Before the drop in properties values of 2008

it had reached a value of approx $450,000. Over those 28 yr's it appreciated at a rate of 

approx 8%/yr. After the huge price drop in values ... I said to myself ... Paul this home will never reach those levels again, 

far too much crime. I let it go back to the bank as I had cashout many times over the yr's and now I

owed $180,000. It sold at auction for $90,000 in 2012. Today's value $500,000+ A 21% appreciate rate over the last 9 yr's!!! 
In A crime ridden area of Oakland!!! 

Buying apartments with low cap rates of 3-5% that isn't any real money!!! And apartment buildings

don't appreciate like Bay Area homes. 

If she only earns 5% on 1.6 mil  that equates to $80,000 in more wealth for doing nothing but collecting rent!!! 

My buddy sold his home 7029 Pinehaven Rd, Oakland 94611 in her area for $919,000 in 2/2020. In less than 2 yr's

it has appreciated to $1.3 mil 21%/yr!!! A neighbors home 12%/yr from $560k in 2014 to being sold for $1.225 mil. 

over the last 7 yr's. My parents old home over the last 61 yr's from $19,500 to $1.5 mil 7.45%/yr!!!

This is the Bay Area ... all we know is EXPLOSIVE APPRECIATION rates!!! 

@Brian Garlington 

It appear you haven't read all the posts. I was pointing out to another poster

the many areas of Oakland all have different appreciation rates. 

My family has been in Oakland for more than 110 yr's. 

I use to sell for Mason McDuffie on Grand Ave back in the 90's. I didn't like

being a realtor. So much easier today with all the technology. 

@Brian Garlington   What is your opinion on Montclair appreciation? 

Do you think Zip code 94611 is the same as 94603? 

Chime in on @Tecsia Evans home. 

@Dan H. 

>> I am not stating Oakland will not achieve a long term appreciation of 5% (but I am stating Oakland will not achieve a long term appreciation of 10%) << 

You are equating All of Oakland vs just the Montclair area of Oakland. Oakland has many properties at A $300,000

valuation in the very worst areas of Oakland. Her property is in one of the very best areas of Oakland. That should be the focus. 

I live in the middle of the road area in terms of valuation in Oakland. The very first home I bought in 1973 in Oakland for $32,500 I sold in 1978 for $65,000. That equates to 15% appreciation / yr back in the 70's. Today's Zillow value is approx $1.3 mil or 8% appreciation/yr. That takes into account 2008 financial crisis. 5% appreciation is way too low for most areas of Oakland. 

$400,000 now  vs $75,000/yr in appreciation is EASY money no matter the cashflow. And that is @ your 5%. :) 

@Tecsia Evans 

All you have to do is use Zillow for neighboring homes. Look at what they sold for as back as you can. 
Start with recent SOLD's. Then calculate the appreciation using the calculator I shared with you. 
I'd KILL MYSELF if it's only 5% !!!! Let alone a claim of 4%. It's Montclair!!! 

It doesn't matter if you have zero cashflow or even a negative!!! A negative means you take A tax write off. 

At %5 appreciation on $1.5 mil = $75,000. Where can you get an easy $75,000 over the next year if you sell? 
Your profit won't make you that in any investment. I expect if you sell you'll build again in Oakland .... but where???

I don't know but I'm betting you've owned this current property for many yr's. Building in the hills can't be easy on those

very narrow roads. Permitting could have changed a lot since you first started this project. 

A friend sold 7029 Pinehaven in 2020 for $919,000. Purchased around 1992 for $96,000. FutureVal over

the 29 yr's is approx 9.2% in appreciation. Over just the last 2 yr's it is approx 15% appreciation. 

At just 10% in 2022 you'll earn approx $120,000 just for owning ... no matter what the cashflow is!!! 

If you need cash for another project & can't refi ... get in touch with Point or Unison ... sell equity. 
I think point will go up to $350,000 with no payments. 

NEVER SELL OAKLAND PROPERTY!!! 

@Tecsia Evans Friend me on facebook & I'll share links to show Oakland values. 

@Tecsia Evans   Join Oakland Now on facebook. We need all the help we can to build a better Oakland. 

Bottomline Oakland has some of the highest crime in the state. Yet property values are lowest ( except

for Richmond).  Look at property values in the worst parts of Oakland and see how much they've increased. 
as we get control of our crime ( and we will ) property values will soar even more. Ignore the comments you've 

read here, while meaning do not apply to Oakland & the Bay Area. I mean where else can you find $500,000

homes in a very rough area other than Oakland & San Francisco. Homes that are less than 900 sqft. exploding in value

exposed to heavy crime & murders!!! Your only issue is mother nature ... living in CA forest is tough. Yet

you've got fire insurance. If it goes up raise the rent accordingly. Run the numbers you'll see I'm right. I know the temptation

is to sell and get that money. You mention building new again ... where??? Very few lots avaibale. In your area a few more mountain goats lots building at what cost $600/sqft or more? You would do better to find a decent home add ADU or add sqft to the home. Just ignore the Montclair home as if it's not there. Start from scratch as if you don't own it. It is your security blanket

that will insure your millionaire wealth status long term no matter how much you might screw up in the future. 

NEVER SELL OAKLAND PROPERTY!!! 

ABSOLUTELY!!! However ... the biggest factor is you are in a fire area. Now A days we 

just don't know what insurance companies will do. I'm in Maxwell Park. Your other biggest

issue as it appreciates .... how do you pull your money out? I mean you're talking min $150k/yr. 

compounding!!! :) :)  Make sure if you rent it to increase the rent every single yr to the MAX

allowed by law. Learn everything you can about Oakland's crazy rental laws, become an expert. 

Insure you add in the agreement something to the effect of owner can move back in with prior to

X days notice without any compensation to tenants. Property management companies will explain

even if you don't go with one get their advice upfront or speak with a real estate attorney. 

According to Zillow ( it's in the ball park) Oakland's Index value is now at $946,382 up 15.9%

over the yr. At $1.6 mil & @15% you'll earn approx $240,000 over the next yr if that continues

in other words $240,000!!!  A quarter of a million /yr just for renting it out or living in it.  

You can use Zillow's previous yr's sold prices and calculate the average appreciation / yr over

3 decades to determine the average. The home across the street from just sold. The old owners 

were tech workers that relocated to Oregon because they can now work form home & wanted better 

schools and the CASH. They paid 6 yr's ago approx $560,000. They listed for $898,000. It had 

offers in less than 2 wks and sold for $1.225 mil. 

Another home sold in 9/2020 for $560k  A fixer. they redid everything including foundation, plumbing 

wiring etc. They listed for $980k in 4/2021. It sold for $1.45 mil. 

You are in the MONEY!!! NEVER SELL OAKLAND PROPERTY!!! :) :) 

Figure out how to pull cash out. There are companies that will buy some of your equity with no

payments and hold for 30 yr's. Point is one & Unisom is another. Co-investing. 

>> main house and ADU we would profit $24k<<

What area of Oakland, CA? Profiting only $2k / mth seems low. 
What are the numbers? 

But let me say this ... selling Oakland property IMO is a NO-NO!!! 

I say NEVER sell Oakland property. Refi always pulling cashout!!! 

At a min 10% appreciation / yr and that could be low. Use a future 

calculator to determine it's value over the next 5 - 10 yr's just at 6% 

appreciation. You'll be SHOCKED!!! NEVER SELL OAKLAND!!! 

======

After reading the other comments you are doing yourself a disservice by

not spelling out all your details. I live in Oakland, CA. the above comments

do not reflect Oakland's EXPLOSIVE appreciation rates. You mentioned 

>> building another new construction project << 

So lets say this current property is worth at a min $1.5 million!!! You said

in a nice area of Oakland and it has an ADU. Using the future cal at only 6%

appreciation/yr. in 5 yr's it will be worth $2,007,338.37. 10 yr's 2.7 mil. 

Yet last yr in nice areas it approx 15% appreciation. So lets do 10% over 10 yr's

$3.9 million!!! 

The money in Oakland real estate is NOT from rents!!! It is from appreciation!!! 
I've owned 5 homes in Oakland over the yr's. I've learned the hard way NEVER
SELL OAKLAND real estate!!! 

A small 1600 sqft home / ADU just sold in San Mateo for $2.5 mil. Be patient!

Your property will get there. Location does matter.