All Forum Posts by: Amit M.

@Robert Larue  good question wrt loan and only 1 year work experience. Have u talked to any banks?

@J. Martin , will FHA loan on that ^^^?

You may need to get a cosigner, if there are no alternatives. 

As for areas in the city, look at D10. It's cheaper and up and coming. You also need to resolve the loan issue, your down payment and what you qualify for.  You're probably looking at $550-600k minimum to get in the city. Probably half or less for interesting parts of Oakland.  Remember, you will get some rental income credit from the other unit(s) in the bldg to help you qualify. 

buy 2-4 units and owner occupy. Best (and safest) way to get started in RE, plus you will learn a sh*t ton. Stay in Bay Area (best appreciation, plus you can live/work.) Now is a good time to buy too. If you can afford SF great!  If not, look at Oakland for up and coming hoods. Maybe other areas too that are commutable to oracle (if you go into peninsula.)  Don't obsess over cash flow. Buy/hold, build equity, refi, buy more. I don't recommend out of state. Many reasons. It's hard to buy here, but work hard and you can do it!  Wish I brought my first prop at 23 instead of 30. Still did well though, so shouldn't complain :)

^ I dunno...where are your normal, middle class* areas?

* people with actual jobs; no drugs and no gov subsidies. 

short answer: keep triplex (refi/HELOC if needed) and buy new place.

Think hard before letting to of good CA RE. It may be your best investment of the bunch!

@Manch Hon I'll add to what J said to be very selective with tenants (look for those that will move on in life, have plans like buying a home in the future, etc.) you can always buy them out too. And lastly, SFH 's and condos are not under RC.

Most important advice: DONT casually dabble in the SF market!  It's hardcore out here. You need to know a lot about the laws, political trends, tenant selection, airbnb/vbro rentals, neighborhood dynamics, etc., etc. to definite your investment strategy. Casual players often get their asses handed to them. If you're in, and you want to win, go all the way!

this thread is quite entertaining, but informative nevertheless :)

I think the OP got push back partly for "the numbers" and partly for going a bit off the rails about cal. Of course people have different preferences where they like to live, that's natural. But the rant about cal taxes, politics, etc. were a bit much.  Like the rant against illegal immigrants. 1- not sure why you're going to Texas. Trust me, there are tons of immigrants there too. (MX/TX Border?)  2- at least admit that the illegal immigrant situation in America is financially symbiotic with the agricultural and services industries. Otherwise you'd be paying $10 for a pound of tomatoes and $8 for the happy meal. To think we do not need, nor drive significant value from their lower labor costs is either willful ignorance or an exercise in absurdity.  (Just watch the Republican Party get their asses handed to them in 2016 if they fail to deal with this issue in an equitable way.)

But back to real estate. The reality is that more real estate derived wealth was created in cal than probably any other place on the planet.  If you choose to sell out here in the hopes of greener pastures that's your business, but I wouldn't consider doing that. The kernel of the appreciation argument is that your investments in cal not only become more valuable, but their rental income is more reliable, they weather downturns better, and the cash flows increase due to their value increasing. Cap rates aren't just numbers folks. They have to be real, and real 2, 3 and 5 years from now.  You just have to be in the game, have a very good handle on your local market, and have the patients to make investing in cal successful. Many have done it, are doing it, and will continue to do so. 

I have a hard time believing that this wouldn't get reversed in court. SF has an activist "Bored of Stupivisors" that is know for passing local anti real estate ordinances that frequently get reversed at state court, and occasionally even get reversed by minor inconveniences like violating constitutional law. IMO this is a clear taking, and will be challenged. 

But never mind all that. As an SF investor (who doesn't flip), this, like many other things done here to restrict supply, inevitably increases property values. The RE and rental markets here are so distorted and out of whack compared to any normal market, it has created incredible wealth opportunities for those who know how to play this game. I could write a short book on all the sh!t that's gone down here. (I should title it, making money in inefficient markets.)  Between the bored of stupidvisors, a host of tenant activist organizations, and of course rent control, average condos are close to $1 mil and homes closer to $1.5 mil.  An average 2BR apartments is now renting for at least $3500. And the tech industry juggernaut keeps pushing everything forward!  

But having invested in SF RE for over 10 years now, all I can say is thank you to all the quasi- socialist policies, the naked tenant pandering, and sometimes just plain sheer stupidity- thank you for creating this highly distorted (and often entertaining) clusterf*ck that has made me a multi millionaire. 

Tag: @J. Martin 

@J. Martin  perspective is exactly the way I interpret it...but I didn't have the energy to write all that, so thanks!

Basically it's not that you HAVE to increase the rent only to market comps, but if you're egregious the tenant will have a case against you.  i.e. if market comp is $3500 for the unit and you ask for $4200, I think you're good. If you ask for $8000 that is egregious. 

Upshot is that you still have significant control with SFH and condos in SF when dealing with tenants.

* in the OP's case, it sounds like her tenants were entitled-litigious-pricks, so yes, doing a rental comp analysis and going strictly by that was the safe thing to do...and it worked...mission accomplished :)

@Helen Chau  sounds like you're doing it right wrt tenant management!  Good luck with the new property, and keep us posted here as to what you decide to get. Cheers!

@J. Martin  yeah I think you're making the right trade offs. It can't all be about maximizing investments...otherwise making Jack a dull boy!  I first went to See Asai when I was 30, and it changed my perspective on life. Quality travel experience is irreplaceable. 

So if you're off work until 7/4, try to make it out to the city by then and we'll hang out!  PM if you can.