All Forum Posts by: Robert Jensen

@Ashley Mack I just did a zillow search for 3 br in Sacramento at max 250k and received 143 results. Though, mostly in the ghetto areas, but they are there. 

"They treat people like children" --this is really what it comes down to. Do I want to constantly have someone watching over my shoulder. They also will not even let a girlfriend move into the place. This (BMR) is not home ownership. There is more flexibility with a lease. 

Very hard for me to give this BMR opportunity up but I feel that it would threaten my dignity. Yearly visits and if I have even a friend staying over I will a letter of explanation and possibly be forced to sell. Then there is this blog from the Director of the Tenderloin Housing Clinic, who points out another serious issue that often goes overlooked. 

http://beyondchron.org/sfs-affordable-homeownership-nightmare/

Appreciate you taking the time to give advice. Its great advice (every 5 years) and a goal I am going to reach for. 

"but work at a job that apparently allows you to work remotely" - not exactly. I can work from home 2 days a week. I would be driving 1.5hrs each way or staying at a girlfriends house for however long. I know people who have had 1.5hr commutes each way for 15 years so I think I can do it for six months or so. Also, I will be looking for a new job soon after I get the place situated. Maybe this will be in Sacramento... 

San Francisco has been my home for most of my life. Its hard to leave but as you mention, it doesn't make much sense to stay unless I get a higher paying job here where the numbers pan out. If not, it is a money pitt and has been for a long time. Its easy to get complacent here. Its quicksand. 

@Chris Mason -- what made you think I had investment properties, rental income, and a lot of money? I've been reading your posts on here and have utmost respect but that was a most delusional reply. 

I don't own any real estate, work at a non-profit, and have $25k saved up over the last 10 years. This would be my first purchase. I would also get DALP from them which would be an extra $20-$40k towards the purchase. 

I can push and probably get qualified no problem. I am the perfect candidate for them. All the numbers work out. The process though is making it feel like there will always be someone over my shoulder. I am also leaning towards Sacramento being a better bet which also gives me freedom to rent or move somewhere else without losing the property at a potential loss. 

Really tough the decision for me to pass on it. The grueling audit they are giving me though is making it easier. 

I am partially through the BMR process and have decided its not for me. It is a great deal. 270k for a 1 bedroom but the restrictions are too tight and the process is too grueling. 

They are now demanding I have legal contracts  (non-occupancy forms) signed by everyone who has given me rent this year while also submitting a copy of each persons DL. They are giving me two days to do this. One of them is a girl I barely know who is half my age and I need to find here and have her sign a form saying she's not moving in with me. Its just awkward, wrong, and could come off as creepy. 

I find they (BMR) keep getting more and more unreasonable. Before this they demanded bank account statements for my ss #. I kid you not. On my tax form my ss number was put as an account number for the tax program to take out there fee. No matter how many times I tried to explain this to BMR it did not sync in until it went through three rounds of people. They are also telling me its going to be like this for the next couple months. Every transaction I make needs an explanation. Even obvious checks to the landlord for rent. Any deposit over a few hundred dollars needs an explanation form. 

I've been wanting to get into this program for 15 years so for me to deny this after winning the lottery is a big deal. I have no intentions on leaving SF. I currently share a 3 bedroom house and pay $1600 in rent. I am figuring I can buy in Sacramento, live there a few months and fix the place up, then sell it or possibly rent it. Move back to SF trying to keep my room in the process. Then repeat. 

My ultimate goal is financial freedom and BMR is not going to get me there. Though it was a decent opportunity. 

Below are the AMI numbers with percentages from prior year. So if you bought in 2014 and sold now you would have made 24%. Sacramento real estate went up 64% from 2014 to 2019. 

One thing to keep in mind is rent saved. the BMR is about 30% less so if you add this to the increase when selling the BMR from 2014 it comes out to about 60% profit. 

So in a 5 year time frame they would both be about equal IF you factor in rent saved. There seems to be a correlation lag between SF AMI and the Sacramento Real Estate Market, given the drop in AMI in 2013 and 2014

YEAR    AMI      % from prior year

2019   86,200    4%

2018   82,900    2.7%

2017   80,700    7%

2016   75,400    5.6%

2015   71,350    5%

2014   67,950    -4%

2013   70,850    -1.7%

2012   72,100    1.4%

2011   71,100    NA

My main concern now, outside of investment, is renting it out. I would in know way want to rent it out at market rate and make a profit but if something were to come up I feel I should be allowed to rent it out at below market rate. They do allow you rent it out under certain circumstances, though its limited and you need permission. 

So lets say I was going to work out of state for a few years and the AMI tanks. I could wind up with a forced loss since I would be unable to hold. This scares me the most. 

If only they would treat these more like ownership and just make sure it is kept at BMR whether rented or sold. Even if I was going to live with a girlfriend for a while and wanted to save money, why not let it be rented at BMR? These stipulations are a bit out there and it appears they are very strict on BMR 'home owners' regardless of whether or not the home owner is being ethical. I'm leaning towards a Sacramento conventional purchase, though the market could go down in the next year --if only there was a crystal ball. 

Here is the BMR manual if anyone is interested:

https://sfmohcd.org/sites/default/files/Documents/MOH/Inclusionary%20Manuals/Inclusionary%20Affordable%20Housing%20Program%20Manual%20-%202018%20Draft.pdf

I have been putting offers on houses in Sacramento. I have been living in San Francisco most of my life as a renter (24yrs). I just won the lottery for a BMR 1 bedroom in Hayes Valley for $250k.

Ultimately, I would like to stay in San Francisco and invest in rental properties or flips (I used to work for a contractor so can do most, if not all, work myself with a hired hand). However, this BMR apartment is seemingly too good to turn down. There are stipulations though regarding being able to rent the place. However, there are certain circumstances where I may be able to rent at BMR, though have to ask permission. BMR is a bit restrictive, though would solve my issue of wanting to keep San Francisco as my primary residence.

Other option is turn down the BMR housing and continue with Sacramento, with hopes of flipping, etc to eventually buy a $800k Market rate place in San Francisco.

I am in my 40s and, ultimately, would like to start passive income. 

So back to my question. Is it crazy to turn down this BMR condo? It does appreciate based on AMI, which could wind up beating appreciation on real estate. Its hard to get data on AMI though but it seems salaries keep climbing in SF with the addition of more towers and cost of living for the employees. however, Sacramento real estate seems very hot right now. Eventually I would like to get in the game and this BMR could set me back 3-5 years. 

I'm completely 50/50 at the moment given my goals. Any input? Thanks

This should be my local forms but I can't delete. Please flag as it will be posted in the local forum. Thanks --I'm new to this. My first post...