<p>Yes, Multifamily will pencil out, if you are careful. But those are big money game, you need Millions. Regarding single family(SFR or Condo), who knows? Sonoma may work, if you buy it close enough to Marin or in Downtown Santa Rosa? I am not familiar with those areas(Marin & Sonoma), so cannot tell you. I am mostly in the “East Bay” or San Mateo.</p>
<p>Ok…nobody really knows anyway…</p>
<p>They teach efficient market theories in school to our kids… theoretically…an investor should end up with the same return…risk adjusted…</p>
<p>Don’t know if the returns are really the same.</p>
<p>An example of a fourplex…</p>
<p>[31</a> Reed Blvd #6, Mill Valley, CA 94941 | MLS# 21106817](<a href=“http://www.redfin.com/CA/Mill-Valley/31-Reed-Blvd-94941/home/896485]31”>http://www.redfin.com/CA/Mill-Valley/31-Reed-Blvd-94941/home/896485)</p>
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<p>Us too!</p>
<p>Even though we live in CA. we’ve found it way to challenging to run this type of business in this state. I could go write a large volume on the problems my folks have had over the years with property in SF. Actually, anyplace in the greater bay area has the probability of being overboard on renters rights and making it difficult to not only run an effective business but also to run a safe and clean environment. Certain municipalities have laws requiring inspectors to enter and inspect units every 2 years (Concord for example and some areas in LA). This is a nightmare which encroaches on privacy rights (no, the tenant may not opt out…in fact if either tenant or owner refuses, both can be fined and jailed.). Obviously never buy in a rent control area (usually doesn’t apply to single family homes but it does apply to 4+ units). </p>
<p>Oregon has a much more reasonable balance between tenant and owner rights and responsibilities. For example, certain students have claimed that their ‘smoking devices’ used to inhale an herb not legal in OR was part of a religious practice. (This is a non smoking building and they sign a specific line on the lease to acknowledge this requirement). In OR, you simply issued a 30 day notice, done deal. In SF, this would have lead to a rental board hearing where the religious rights argument would prevail. </p>
<p>So, yes, it can be a good way to make a , but like all jobs it has it’s stresses and strains. And, you need to know not only the spreadsheet numbers but also the political climate in which you intend to invest.</p>
<p>Thank you Dstark. Buying foreclosures and short sales was a difficult process. There were few if none regular sales in the areas we were looking at. It took 2 years and 17 offers before we succeeded buying the first one. Dealing with seller banks was very very difficult and the process was opague. For eg. there were a few occasions that the house sold for less than we offered. </p>
<p>We get about 4% return on average on these houses, taking into account vacancy (1 month), maintenance expense (1 month), management fees (1 month), taxes and other misc. expenses. Before tax income came out to about 50% of the gross rent. </p>
<p>Usually I find, the better quality of the investment - meaning more desirable location => better capital appreciation opportunities the less the cash flow.</p>
<p>Dietz199… i like your post.</p>
<p>Munchkin…</p>
<p>“Usually I find, the better quality of the investment - meaning more desirable location => better capital appreciation opportunities the less the cash flow.”</p>
<p>Yes…you said this better than I did. :)</p>
<p>I can’t believe how much you persevered to invest.</p>
<p>I was thinking about cash on cash investing in real estate…and
The returns look pretty low…</p>
<p>Maybe it is better to use leverage…</p>
<p>I’m just talking to myself. :)</p>
<p>Since you are only making 3% or so, and the cost of the mortgage will be 4 or 5% (at least), leverage in this case is going to really squeeze your cash flow. </p>
<p>If you put 30% down and finance the rest at 4%, that is an extra $20K per year in expenses. You stated $10K in property taxes and condo fees, add the mortgage and other expenses, now you have negative cash flow, and your return is only from paying down the mortgage,</p>
<p>Plus the closing costs will be substantial.</p>
<p>That is true…you are right…</p>
<p>A friend of mine just bought a fixer upper in the south bay with a couple of partners…
And they are going to fix it up and flip it…</p>
<p>And the realtor in the deal said my friend should buy at auctions on the courthouse steps. Better deals…</p>
<p>just saw a house bought in Oct. 2011 for 250K, they fixed it up and now sold again for 480K, it is my model home for the future transactions.</p>
<p>Nice…</p>
<p>It is harder to buy at auctions than it looks, isn’t it?
My friend is very enthusiastic.:)</p>
<p>Its hard to buy anywhere that can make money. The 1000 eyes theory still works with any thing that makes money. :)</p>
<p>It is easy to buy, if you just want to live in, but that has to pass your wife’s eyes.</p>
<p>:)…</p>
<p>My wife loves our place…</p>
<p>I’m good there…</p>
<p>I just have to remember to close the garage door. :)</p>
<p>Artloversplus…I was just talking to somebody that is buying a home and going to fix it up and flip it…and his labor costs run…$12 to $40 per hour.</p>
<p>I am surprised the rates are so low.</p>
<p>That is quite a bit lower than SF or Marin.</p>
<p>if he is a contractor, he can get that labor rate, or even lower. If you rely on a contractor, the cost will be lot higher. I painted my whole house, inside and out for $15/hour+ material. But I was acting as a contractor.</p>
<p>His partner is a contractor.</p>
<p>I am watching this deal…</p>
<p>If it works…I might do the next deal…if there is room.</p>
<p>
Is he checking green cards?</p>
<p>:)…</p>
<p>I heard the following from my city’s permit officer: If you ever have doubt that your contractor hires workers from those DIY’s stores’ parking lot without proper worker’s compensation insurances, you shouldn’t be the one who files permits. Let your contractor does that, otherwise you are responsible for all the bills in case those workers get injuries.</p>
<p>Fresh off the email from property manager :</p>
<p>The prospect dropped off his application this afternoon and would like to move in as early as tomorrow. Please review his summary and advise your approval. He has got credit however several minor criminal offenses.</p>
<p>Tenant Summary Report:
- Male age 22
- Pets: small dog
- Monthly income $5400 (Entertainer/Recording Artist)
- Verified employment status in the past two years- Employment confirmed
- Verified credit history Credit score 0 no outstanding debt
- Verified eviction record and other negative public record a few misdemeanors reported several years ago
- Verified rental history Excellent rental reference from previous landlord
- Rent terms: Monthly rent $1200, Security deposit $1200, Nonrefundable pet fee $250, 12 month lease (can we give a rent credit for the last two days of March 30th and 31st)</p>
<p>The apartment had been marketed and vacant for a month. </p>
<p>Decisions decisions.</p>