All Forum Posts by: Rich Lopes

Yes more appreciation and as it is it's so hard to own a RE in SF, Bay Area. 

@Simcha Davidman, Thanks for the advice. No, I am not planning on selling this currently hence I had this question otherwise it would be no brainer. My initial investment in the property was only $800K and not 1.3M so I believe my returns are slightly better that what you have calculated above. 

Thanks Greg. How did you determine that it's a negative cash flow property? I am just about to break even. The reason I want to own a personal home vs another rental is to take advantage of tax deduction on Mortgage, property tax etc. Although I can do the same on rental property but the rental income basically nullify the deductions and I feel like I am paying way too much towards my rent and might as well buy a property and let it appreciate while I pay it down. As far as liability, don't you think it's same on both personal vs rental? 

Hi 

Looking for advice on the following scenario:

1. Currently own a rental property worth about 1.3M. Owe about 600K on this property on a 30 yr fixed @ 3.75% with 27 years to go. Rental history of 4 years with current Rent of $3900 / month.

2. Looking to do cash out refi and take out about 300 - 400K for a down payment to buy SFH for a primary residence. Currently living in a rental.

3. What are some of my best options in terms of financing? 

Hope to you hear from some creative financing gurus. TIA.

@Mihn Le, your insight is phenomenal. Thanks! I did not get when you said, wait until the tail end of Recession. Does that mean we already in one? :) The whole interest rate thing is so confusing and worrisome and I am afraid that we are not creating another bubble of Greenspan era. The lower interest rate has more to do with the overall economy than to RE market. RE happens to be benefiting off of this, but there is definitely no dearth of demand in RE across the board, otherwise we wouldn't be seeing multiple offer situation across the bay area at least until few week ago.  Please correct me if I am wrong but with respect to Walkability and close to BART there is only so much that one can get in this market  IMHO. I mean in terms of prices.

Originally posted by @Account Closed:

Originally posted by @Michael Wear:

Maybe a stupid question... what does HAI stand for?

Hi Michael,

HAI = Housing Affordability Index.  I think we're approaching the upper threshold for San Francisco, San Mateo and Santa Clara Counties.  If history is any indication, we should have reached the peak by now.  Unlike previous housing recovery, where interest rates moved higher in the last 2-3 years of the cycle, interest rates have been trending lower for this recovery.

To put things in perspective, When HAI is in the 40's, it indicates we're at the bottom of the housing market for Santa Clara county, and 15-16 indicates the top.  This means that at the bottom of the housing market, 40ish household can afford to buy a house.  At the top, 15ish household can afford to buy a house.

San Francisco's numbers are even more insane.  HAI of mid 20's indicates the bottom while 9-10 is at the top.  San Mateo is 28-30 for bottom, and 11-12 is top.  

RIGHT NOW, they're 13, 16 and 22 for SF, San Mateo and Santa Clara counties, respectively.  The low interest rates have really helped out with the HAI.  So place so bet accordingly.

Best of luck.

 Hi Account Closed, Would you mind sharing your source of data for the above HAI nos. you provided? If SCC is still 22, does it mean we have another 6-8 months before we see the top? Unless there is some catastrophic events like 9/11 or '08 finacial debacle, do you think we might see these nos. getting breached?

What's your take on investing outside of Bay Area such as Lake Tahoe or Modesto or other low priced areas outside of Bay Area in N. CA?

Dhar Rawal great to hear this story. How did you manage to pay $1.2m in cash when you said you had only $250k in 401k. Did the rest come from other sources or am I missing something. Good luck on Rehabdaddy.com. Is it something on the lines of RealtyShares.com?

@Andrew Faukner, Thanks for the great Advice!

@Lenny B. Has you research taken you anywhere so far? I had the exact same question about buying or rehabbing a property or 2 around S. Lake Tahoe. I would love to connect or hear more from you on your experience so far. Thanks!