I made big money on Self storage in Sac…Just turned down another one…Not pre fab, but pre engineered. .Read the articles I posted. .The construction hard costs are not the big issue…Now Sac has caught the entitlement attitude diseases from the BA…Delays and jacks up the costs…So buying old class C apartments makes sense…Very little risk someone can build something cheaper…BTW…it is the entitlement process that hurts the prefab industry. .Towns are not set up to deal with it. Planners are prejudiced against it…And inspectors are clueless about it…
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Good to know! Tell us, is this boom for real or just a repeat of the past? Are we actually seeing more big time employers locating there (as promised before) or honestly just more people moving there from the Bay to escape the pricing (but they still commute down here for their paychecks)?
Forget high speed rail to LA…How about just to Sac…Highway 80 is becoming like the 405 in LA
So price in 1976 vs 2014:
Sac: 50K vs 275K 5.5X
SF: 200K vs 800K 4X
Conclusion: Sac > SF
Yeah, I saw that (% increase) but again would I rather have SF long term or Sac? It wouldn’t be Sac…
I believe @elt1 has been bullish on Hayward for years, dating back to the Redfin forum days.
I have been racking my brain where to build my 100K rental income stream. Self storage sounds attractive, but I don’t see that many deals on loopnet. Is it time for me to pay loopnet $300 a month subscription?
For multi-fam I am dead set against Bay Area. I am thinking whether Central Valley will catch the rent-control madness from the coast. Small multi-fams 2-4 units are on fire in Stockton. I have never seen so many Redfin Hot multi-fam in any areas like Stockton. I bet most buyers are Bay Area scumbags like myself looking to bank on the upcoming min-wage hike.
I am also closely monitoring another bay area, the Tampa Bay area in Florida. I need to do more homework on that area.
Hayward has gotten wicked expensive…I want a commission from all those who took my advice…lol
I have friends with older tired apartments in Hayward…Everytime the rents go up they get offers…They will never sell
It is even closer to BART. It is next to Mission blvd which is a plus and will get gentrified faster. Metal bars on front door give me pause. Perception of crime is reality as someone recently mentioned. I also remember manch point - pick neighborhood for rental that you are ready to move in with your own family.
The Rent Zestimate for this home is $2,295/mo
PITI for this home with 25% down and 4% interest is about $2,600, so it will be cash flow negative under optimal conditions. Lets assume B/C tentant pays and then stop payments, then dealing with eviction = 60-70% of planned rent collected.I think it is a long shot.
That makes me think - we are at the tail end of the cycle. Chance of economic slowndown higher. Geopolitical instability can be a trigger for next downturn. Will it be more prudent to keep powder dry and wait to get a discount? Is it a wishful thinking or sane approach? It is better to have safety cushion and start from the bottom, then buy at the top?
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For bay area, this is the only attractive piece available as deal, but the chances are going to high cash investors. Then, it becomes money makes money.
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This is the key anywhere or any cities you buy !
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Build 100k rental income stream? Look no further than East Contra Costa! Worked wonder for me through the years. One house there alone netted me $1000 per month income.
Do NOT buy anything in South Bay if cash flow is what you desired…
Yes, getting expensive, especially high up in the Hayward Hills with view to the bay.
Last weekend, I visited one of the builders inside the Stonebrae Country Club (top of Hayward Hills.)
I remember about one and a half years ago, when they finished/released the first house on their street, it was about $1.1 million…
Last weekend they told me the last house on that street was just finished/released, and the price (same floor plan) was $2 millions. Almost double the price.
And there is a waiting list of buyers on that house.
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Hey, to be fair, I am not one to say one thing and then act differently. I too am on the sidelines with cash ready to go but here I am sitting it out or looking for my next pocket buy. Perhaps the market is topping off. Look, all I am saying is that you presented a property and I have too here that are fairly reasonable for buy-in around these parts. Come on, 500k for a Bay Area SFH. Not too bad. Seek advice always but do what you think is the right move for you. The thing that I find funny about everyone’s suggestion about only buying rental property that you would feel comfortable moving your family into obviously flies directly contrary to reality since EPA, Oakland in general, and say Bayview were those areas to avoid yet are all hot markets that are now gentrifying at different stages.
@sfdragonboy - really appreciate yours and everyone’s advice! When I see house under $500K - seems like a diamond in the rough. But given where we are in the economic cycle, more rough than diamond. Hey - I think any place in Hayward will be a play on appreciation, but maybe prices are topping of there and makes sense to wait and get same property with lower price and pay lower prop taxes too.
I am struggling with same dilemma too. It will be easier to ignore lower quality neighborhood and see appreciation potential if numbers were there and it was a cashflow positive from the get go. Who knew that Oakland will be growing in price faster than established SF and Peninsula locations. I think if you start from the lower point, you have more room to grow. If folks have to qualify for mortgage, chances are cheaper house will find more incomes to be approved in these tight lending standards. If it is a Cupertino house, it is a different buyer that is parking funds or IPO money.
@e_z,
I am a straight shooter and wouldn’t advise you or anyone contrary to what I would do if I were literally in your shoes. If you are the slightest squimish about buying, don’t buy. At the end of the day, you gotta be able to sleep at night.
I saw my close family friend on Saturday whom I have known all my life. He is a big time flipper and well known due to his real estate related business. He finally was so relieved that he sold a multi million dollar project (I think he said 4-5M SFH in the Fab 7x7). He said the remodel in totality was nearly 1M. OMG. He didn’t accept an offer awhile ago last year if I recall (cuz he was greedy) but it worked out for him. See, for some people like that they have a lot of cash or reserves to oh just pull the property from the market and let’s wait until next season while the meters are running… Who does that? You and I have to make money the hard way, which means we have to occasionally go to the lesser expensive properties to eek out a profit. Nothing wrong with that and I find it actually quite satisfying. Good luck!
Can we trust your numbers? It doesn’t matter whether what you say is true or not. What we want to know is, from now till say 10 years, 20 years or whatever number of years you want to hold, would Sac > SF or SF > Sac. Investment is about the future, not about the past. We shouldn’t use past numbers to extrapolate, you can however explain why the trend would continue.
Net income or gross? Gross can be achieved via 1% rule housing with $800k, 20% down = $160k, $640k loan 
Well, our Fearless Leader was just using my charts that I found online…
My point would be why hasn’t Sac taken off a long time ago and essentially sustained it? What is different today? I still say it is somewhat employment related. If big employers did actually go up that way and stayed surely Sac would be doing fine now as the local economy would have been able to weather storms reasonably well. The fact that it took dumps in the past is a legitimate question as to whether it would do so again in the future in my opinion.
Hold the same philosophy. Is why I don’t buy anywhere else in Bay Area except SV. Also why I bought in Austin.
This is margin of safety, play when and where you are confident, that is it. I want to buy the location where I am comfortable.
There is no one size fits all. There are many ways to progress. My way is where I am comfortable and where I feel safe for my investment !
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