6 Unit Building in Millbrae

This multi-fam in Millbrae just closed escrow for 3.26M. Gross annual rent 154K. It’s actually on the good side of El Camino. Price is pretty reasonable actually.


I get $110k gross in South Lake Tahoe for 8 units
I would happy with $1m
Price in Millbrae to high

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Seems really high to me. After taxes and maintenance you are on fumes. Unless the owner plans to raise prices quite a bit or do a condo conversion and sell off the units…

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The seller made almost $2m profit… Think this buyer will?
In 0nly 13 years

If the tax bill passes, and then nation decides to massively devalue the currency (to cause inflation) to pay off the deficit… then yah. $2M in devalued dollars :wink:

oh. Dug into the listing more. rents are low. Market rent for those units would be about $3200 each. and since all the leases are month to month. Getting it to market will net almost $240,000 a year in gross rents. At that price, it’s a decent deal.

Less than 600K per unit is pretty cheap in Millbrae. It’s also in the good side of Millbrae.

A good price in Tahoe is $100k per unit. Rents in Millbrae aren’t 6 times as much… Maybe three times. So your cap can get double return in Tahoe

How about overall appreciation, though?

7.5% compound from 2004 to 2017. Not bad.

Tahoe rents are skyrocketing. My place is up 35-50% in value in 18 months.
Low end properties are bound to go up as min wages increase from $10-$15 in the next 4 years

If your place in Tahoe is so hot why you keep trying to sell it off?

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So you think a 3 cap is a good value and an 8 cap is hype?
Sorry but the BA koolaid is not that good.

I like making quick profits. Besides no one on this forum will buy it anyway, afraid of the exburbs. Not ready to sell. Just pointing out how overpriced the BA is…Planning my California escape. Probably put it on the market in May 2018, have to convince wife first… she likes cash flow, I like quick profits. Am a flipper at heart… hate tenants taxes and toilets…
Besides rather pay 15% cap gains than ordinary income plus SS on rentals… let’s see how the tax plan shakes out.

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When it comes to rental investment, ROI + Cash flow are important factors. Not only Millbrae, but also entire bay area Sunnyvale to SF (except Daly city and San Bruno) multiplexes are very expensive. Buyers are equating current rent, but they should calculate 20% down rent and see whether they can withstand such pressure in future.

Exactly, this is the way Warren Buffet thinks when considering investments, within how many years he will get back his original investment money?


In Tahoe I could get my money back in 4 years 25% IRR…Double my money, then refi or sell…BA who knows…
Sacramento is the place to go for multi family. rents will follow min wage gains. plus no one can build for less than $250k Unit. Plenty available at half that price. Always buy below replacement costs…
Tahoe is an exburb of Sacramento…

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I never said that, don’t read too much into my question, just wondered why you wanted to sell all your properties but I get it if you don’t want to play the landlord game. Tahoe is not my thing - I don’t like to ski or snowboard.

The new tax laws will possibly change my strategy. But for most of you buy and hold is the best strategy.
For me flipping is my life, since 1976. Being a landlord isn’t nearly as fun. And thanks to the current House Bill not nearly as lucrative…

I was under the impression that the tax bill didn’t affect investment real estate?

It attacks California NY New Jersey Massachusetts Illinois
Our taxes are going up to support corporations.
Huge deal for many. How much state local property tax do you pay?
This affects everyone in California and means a possibility of real estate values dropping
The main concern I have is SS taxes on property management of my own property…

Keeping capital gains at 15% makes flipping long term gains more attractive than buying and holding for me