Defeat Prop 10: Strict Rent Control, Housing Freeze, Economy Freeze and Frozen Tech


#563

Where are your MFH’s? What’s the cap rate for you?


#564

Our MFH is in Santa Clara, Sunnyvale and San Mateo with one crappy commercial property I have left in Sacramento


#565

How does rent control help you? Santa Clara can limit rent increase to 1.2% per year, will it help you or hurt you?

In rent controlled SF, tenant occupied multi family is crazily cheap. If you prefer rent control, I can help you buy many cheap multi family buildings in SF. Low rent, long term tenants, zero vacancy, old and tired condition.


#566

First of it will never be limited to 1.2% unless they agree to keep prop tax in line and below 1.2% as even prop 10 enshrines fair and reasonable return. It will fail this test if costs go up faster then rents

Second the assumption is on long term 10-20 years and vacancy decontrol is not in place. The effect of rent control is to constrain supply and raise rents. So you are depending on tenant turnover to take advantage of rent increases

Hence why i said good area. If you are renting out in good areas you are going to turnover every 2 years or so, that way you can capture increased rent


#567

Interesting definition of good areas. For a moment, I thought you mean longer tenancy :slight_smile: of good tenant profile.


#568

Prop 10 will remove vacancy decontrol, you may never be able to raise rent when tenant moves.

Also SF makes annual rent increase as 60% of CPI. If 60% of inflation is ok, I think 1.2% is totally possible.

Your definition of good area might be targeted as housing discrimination since you will focus on tenants who have good social mobility.


#569

Tech workers are mobile. They change jobs or start a family and buy houses and leave. We like to set up our properties to appeal to younger people / families / techies as they won’t stay too long (2-3 years)


#570

Housing discrimination. Just wait for DOJ to lock you up.

Tenant lawyers will send a big Hispanic family to apply for your house and file a $5M lawsuit after your rejection.


#571

I target similar profile in Austin, 3 end up not the correct profile. Very surprised given that I bought in good school neighborhoods. Btw, strictly speaking I don’t have rental in Cupertino since I didn’t buy with renting out in mind.


#572

Buy hospitality and self storage. No rent control and higher cap rates.


#573

Enough with buying rentals. Should start buying businesses instead.


#574

Self storage is a good business. Hybrid business/rentals. High turnover requires onsite management. High caps.


#575

Too old for that. I am not as young as you. I belong to the group that should invest in the youth, and soon be lazing around on the beach.


#576

Self storage is good but deals are hard to find.


#577

My former partner just built one in Folsom. Home run. Grosses $50k/m


#578

You keep forgetting you have two sons. Make them work for their inheritance.


#579

Wifey and I had long discussions on school districts. We realized good school districts attract people with kids. They tend to stay a long time. We decided it was better to buy in medium school districts (not bad, not good) that is near good transportation links with a decent walk score. That would attract people who need to get around (for work) and like to go out (younger people). It also meant they won’t stay too long (schools are not great) when they want to start a family. We avoided bad school districts as the neighborhoods might be bad.


#580

Dude: don’t be a troll. I just outlined why prop 10 may benefit people like me but i am still voting against it. I may just vote for it because you are being a troll and encourage people to vote for 10 as well


#581

Let’s not create FUD. Prop 10 does away with inability to vacancy decontrol but does not mandate vacancy decontrol. The local area still needs to pass vacancy decontrol. Vacancy decontrol is likely a bridge too far for many cities / counties.


#582

Berkeley had vacancy control. Costa Hawkins banned vacancy control in 1996, but it’s still in Berkeley rent ordinance. If Prop 10 passes, Berkeley will have vacancy control immediately.