All Forum Posts by: Amit M.

I'll third what has been said- there should almost be a biggerpockets/Bay Area edition, as not only are our numbers so radically different, they are actually counter intuitive to the rest-of-country investors. Months ago I remember posting about a typical SF deal, only to have people pleading with me; I think it got the worse deal imaginable award or something!

The bottom line is that you need serious money to make money in the Bay Area. It's almost impossible for a starting investor to get in unless you won the lottery, have a trust fund, rocked out an IPO (choose one.)

But for those of us who are already players, accessing existing equity is a great advantage. It's basically trading cash flow for future appreciation. In SF rents have been at an absolute tear. Example: an 800 sq ft unit in the über-tech-hipster mission district rented for $2200 in early 2011. Just re rented it for $3500. Got to admit it was rather fun having people line up/kiss butt/compete. I ended up taking this sweet techie couple who threw in a $200 bonus. Some nice sushi lunches, here I come :) So it's time for me to trade in some cash flow and get another asset under my belt.

I just recently started making offers, and yes I'm shocked that even POS's in lesser neighborhoods are getting snapped up. Lots of Chinese money and established SF families and investors buying all cash. I actually think my best bet is the fool who over prices, then his bldg sits on the market 30-60 days. Sometimes they soften and you can come in with a marginally lower bid and get the deal. The smart sellers put out the teaser price, and watch punters fall all over themselves in the typical bidding war.

So I quickly adjusted my attitude from "find a deal" to "just get something that is ****ing reasonable." I have a very specific building type and neighborhood demographic that I'm targeting. It takes advantage of SF's screwy rent control laws and gentrification. I'm confident if I get what I want that it will be worth $$ hundred of thousands more over the next 2-4 years.

How about all you guys? How bullish are you on appreciation in the Bay Area over the next 2-4 years? The tech bubble/no tech bubble is the sixty thousand $$ question, isn't it!

it's interesting reading some of the new Bay Area investors perspective here, and the comments by @J. Martin , both whom I know. I think the biggest barrier to investing locally is the old adage- it takes money to make money, especially in the Bay Area. I hate saying that, because when I first started here, 20 years ago as a young guy, all I had was the $16k my grandmother left me. I literally brought my first place in SF with that. Today you need more like $100-200k to start investing locally (prime Bay Area) IMO.

What I'd recommend is for a young single person to buy 2-4 units, live in the smallest one and rent the others out. Or buy your first condo/home in the best location you can afford. Then wait 2-3 years for appreciation. Refi or take out a second on that equity, and get your second place. It's just that it's much harder to jump start that process now, then it was before...and will probably be even harder 5 years from now than today!

Investing in the Bay Area is heavily predicated on appreciation. I disagree, however, with the common notion that appreciation is purely speculative. That's BS! If so, I've been speculating and making serious bank for going on 20 years. And not just me, for everything in SF is selling like crazy- SFH, multi, good or bad areas, etc. And also in San Mateo and Santa Clara- someone is buying all those expensive, poor cash flow properties. And most likely they are wealthy investors who have made money in these markets before- by appreciation and leveraged.

Once you get familiar and comfortable with an area, the scenario goes something like this: you were driven and brought a starter condo/home in 2010 when things were down. Now you have some appreciation. You take out a second, say $200k and put it down on 2-3 units. It's not the cash flow you are after, it's being able to buy and sustain a decent property in a decent market for the next few years. Rents go up, cashflow improves, and you gain equity. When the time is right you leverage and do that again. The key is when to leverage (beyond the obvious data point of when you can; i.e. Like at the start of a boom cycle.)

That's the only way I know for a young person to get in the RE investment market here. Or if you come from a wealthy family, and come to think of it a lot of people here now do. Probably in so small part from having RE assets here. It's a vicious cycle, but you gotta break in somehow and get on the train.

hey, hey!

I'll try to make this one. I just got me a fat HELOC, so will have money to blow on a new investment property ;~)

Anyone with even an inkling of a off market/MLS 2-4 unit property, in San Francisco only, give me a shout out!

my personal advise: buy in SF, hand down.

Why? We're at the start of the RE cycle and I believe your chances of significant appreciation are very high. You can later buy in FL if you wish, but I wouldn't be surprised if the percent equity you gain in your home is greater than what you gain in equity plus cash flow in FL.

FL is mostly a boom and bust market. SF is basically an up and up market. As you know it's extremely restricted wrt growth, has tons of tech money pouring in, and is in constant demand. Like everywhere, SF went down during the recent Great Recession, but most neighborhoods were down 10-15% while most other cities were down 30-50%. And SF is already up BEYOND its high of 2007. It's like recession, what recession?

Oh, and as for the 'my home is/is not an investment' debate, here's my take: if you gain equity (almost a certainty in SF) than you can borrow against it to buy more real estate (and to me that makes it an investment.) Worked for me. Like a charm.

My personal opinion- if you can afford to buy here, do it.

A question to postlet experts:

Is it mandatory to list a phone number with each ad? I see it as a field to add, but can I block or mask it before publishing? Reason is that I prefer for people to contact me via email, and not call me for the initial contact.

Appreciate knowing if this is possible. Thanks!

so craigslist has been the stalwart, but I'm hearing of new web sites and apps that take advantage of social media, crowd sourcing, etc. specifically for apartment rental listings. Sites like zumper, lovely, etc. doesn't trulia and red fin now also list rentals?

I've been using Craigslist as a default for years, but want to plug into the latest site or app that tech oriented people are likely to use.

Any ideas which are the best/most popular? Is there a regional slant? I'm in California/Bay Area. Thanks!

@Kathryn M. "Obvious downside is that I can't access that appreciation for investment."

You actually can access your appreciation. By refinancing and pulling cash out, beyond what you owe. It's a classic investment strategy, especially In areas like SF Bay that have high appreciation rates.

It's going to be tough to get cash-flow now. If you brought 2 years ago you got in at a good time!

* What city and how many units do you own?

Some strategies you may want to think about are: 1- buying a fixer where you can get some upside with renovations. 2- buying in more marginal areas in SV. I've been in SF for 20 years so don't know the valley as well now, but maybe east palo alto or parts of San Jose, or parts of redwood city east of 101? I'm just guessing. Not even sure if EPA is still considered ghetto or if it got gentrified.

Also there is a monthly "east bay meetup" that you can check out to meet local investors (people come from all over the Bay Area inc. SV.) Search that term to learn about it. Cheers.

@Anna Ng hi and welcome to our meetup group!

Glad to see you own rental buildings in SF, as do I. Despite the super high costs and crazy tenant situation, I'm still looking to buy another prop in the city. Let's talk more at the meet up. See you there :)

J- thanks, got the email on the change in venue.

Also, you may (if u can) change the orig post on page 1 to reflect this, so people don't get confused last minute, as it still lists Rosemound.

I have a friend who invested heavily in Baja, Mexico in 2005-06, and basically got his *** handed to him. I looked into it, but backed out as title is almost always never a clear cut and dry situation. It's frickin crazy! Compared to buying in the states, it's a given that you will receive clean title, or else you run away. But in Mexico, so many foreigners entertain the notion that they will buy now, and eventually (read: hopefully) obtain clean title. This is especially true of properties in Mexico in proximity to the ocean.

My observations have shown me that there are basically three kinds of international RE buyers:

1- expats. They live there and can hopefully sort through all the ins and outs. Plus they usually live in their properties, or manage as vacation/part time living. This can make sense IF you live in the country and really learn what the hell goes on in their RE market.

2- foreign born living in the USA/Europe and seeking to buy in the homeland. That's me. Usually we have family and contacts, to make sure we don't get screwed. And even then, it depends on the country. In my case, Israel, it's like buying in a first world nation, with secure laws and regulations. But even then, I am super cautious and plan only to spend truly extra money. I see it as a second home, and not a key investment vehicle (although the RE market in Israel has had fantastic returns over the last 20 years.) not being in my main USA market, I still will only invest there with extra, non core money.

3- Indiana Jones type adventurers/thrill seekers- like my friend who brought in Baja, they let the mystique and romance of the land take precedence in what amounts to a pure gamble. No thanks. I'll happily talk to you, "invest" vicariously through your fantastic stories, but that's pretty much it. Beware!