How To Make $2 Million in Real Estate in 2 years in the Bay Area

Interesting forum thread from BiggerPockets:

You don’t really need to read the whole thread, but OP’s post itself share some things he and his partner did with multi-family units in the bay area.

Take away: you need to put in $2.25M to make $2M in 2 years.

I don’t mean to belittle Minh. I’ve met him couple times at San Jose meet ups. But you do need to put in capital to generate returns. In this case, lots of capital. It’s not magic.

I agree, but isn’t it all the case with Bay Area real estate? Higher entry but higher return. I am sure there are tons of flippers who are killing it in the bay area, maybe even more so than these numbers. But I am more impressed by the fact that happened in last 2 years and knowledge I learned about multi-family deals.

I think a big advantage of MFH is the financing? If you can improve rent you can re-fi at a higher valuation, without you the person having to back it up with your own credit and income?

After seeing the spread of rent control throughout Bay Area I am more leery than ever to jump into MFH. What else do you learn about MFH?

Yes, being able to generate that return in 2 short years is pretty impressive. Looking at my own record I did a 3X return but over a much longer 5-year span, and that happens to include the best buyer market of our lifetime. More luck than skill.

Financing is both pros and cons. MFH (5+ units) can enjoy its value based on the operating income vs 1-4 units value are based on comparable in the area. So you can do a lot of value-add to commercial multi-family. But at the same time, you need commercial loan so 20 to 25 yrs amortization and interest rate can be locked in for 5 - 10 years while 1-4 units are enjoying 30 yrs fixed low rate these days.

Still learning about multi-family. Here is local investment club focusing on Multi-family. They have online webminars to join too. And Neal who run that club has some interesting data analytics: The Bay Area Multifamily Real Estate Investing Meetup (BAMF) | Meetup

MFH is scary in BA because of rent control. A friend just sold 6 units in SF and 1031 exchanged into 113 in Reno…Best deal I ever did was MFH in Sacramento, got in for less than a down payment for a house in the BA