patrick.net

Malkovich says

Oakland multi-units

How where they acquired? did investors snatched them at auctions? If that's the case than, may be.

Malkovich says

That said, I could have bought this building and within two years almost doubled my money. I can't believe the extreme lows and highs of this RE cycle - well, let me take that back, the lows did not even go that low (aside from in the ghetto or out in the boondocks - nice neighborhoods in Oakland or especially SF hardly even dipped).

You call a 30% haircut "hardly even dipped"? Look, I'm sorry to say this, but you missed your chance by about 2 years.

Malkovich says

I hate those self-entitled land barons on Redfin BA forum with a fucking passion. I read that forum for a while and it has nothing to do with buying RE. It is a bunch of douche-nozzle old-school landlords rubbing their hands together like midas and joyously discussing the their rising net worth and exchanging land baron tips and tricks.

Ugh. I left the Redfin forums a long time ago when the moderators started deleting posts from anyone who disagreed with the douchebags.

Malkovich says

bubblesitter says

Doubled in 2-3 years? what are you talking about? you have data to back that up?

I could find numerous listings and show you. I'll try to dig them up later.

I will qualify my remark in that I was referring to Oakland multi-units in zip codes 94610, 94611, and 94618.

Actually, more than doubled:

donjumpsuit says

here are more Chinese in SF than anywhere else.

Not true. There are over 100K more people of Chinese origin in NY-metro than SF-metro, and LA isn't far behind SF (only about 65K fewer).

It's certainly the narrative we've been given, but no one has ever presented much evidence that there is an en masse emigration of Chinese citizens to the Bay Area. The closest we've had is realtors claiming "all I heard was Chinese at my last open house." Plenty of people who have been here for 20-40 years might be speaking Chinese, so that doesn't mean anything. Anyone at an open house in Fremont might see only people speaking Chinese and Indian languages, but that doesn't mean all of those people are fresh off the boat -- far from it.

As for actual hard numbers, there has been an uptick in EB-5s, but it's still not that much overall, and USCIS is slow at processing them. You can see from the data that there is a backlog. This is through Q3 of 2013, and an I-526 is the initial petition, whereas the I-829 is after a successful investment of at least 2 years after which the petitioner can request a green card:

http://www.uscis.gov/sites/default/files/USCIS/Resources/Reports%20and%20Studies/Immigration%20Forms%20Data/Employment-based/I526-I829_performancedata_fy1991-2013_qtr3.pdf

As you can see, lots of people never make it to the I-829 stage and drop out of the program. State Department data showed that the number of EB-5 grants was probably less than 50% Chinese in the past, but is probably more like 80% Chinese now for EB-5s, so it's not insignificant, but it's not what realtors are telling us either.

However, all you have to do is look at the State Dept data for E visa categories to see that large numbers of Germans, Australians, Mexican, Japanese, and Koreans come here on E visas for investment or trading purposes. Why don't the realtors talk about these people? Not to mention the large numbers of French, Taiwanese, Italian, Spanish, and Canadian folks who get E visas too. I don't hear about these people either -- maybe they're paying in Euros and Loonies, too, eh?

donjumpsuit says

But Wall Street can borrow money for far less than it costs to use their own capital. They earn a return for that money though rent, and in a few years, will own the property outright, which will increase returns by lowering the expense.

Yes, Wall Street can borrow at much cheaper rates, so they pay cash. However, you don't understand ROI. If they own the property outright, they will certainly have a lower return. Whereas if the property is leveraged, ROI will be higher.

edvard2 says

Many parts of Oakland I used to feel a little uneasy walking around in during the day now might as well be a West Coast Brooklyn

Are you walking around the same parts of Oakland I'm walking around? Even my friends who own houses in Oakland have said that parts of the city that had been getting safer due to gentrification have started becoming more dangerous in the last 3-4 years. I've noticed it too when I've been there. Some of their Oaklander friends, especially the ones that have had kids since they moved to Oakland, have sold and moved because of this factor.

As for the dumps in East Oakland. Investors looking for a pay day could be one answer, but who knows. However, I'd have to see the actual properties to say.

Malkovich says

I hate those self-entitled land barons on Redfin BA forum with a fucking passion.

By the way, I don't think they're land barons, but rather realtors trolling the boards. Anyone who says something like "And remember to remove all of your contingencies and get pre-approved by a local lender who does a lot of volume in the peninsula" means they are a realtor, obviously. I refer to them as "the pre-approval ladies" when I see them.

Sign up for the next survey showing that people in the U.S. are just spending all their money on stuff like houses.

http://www.federalreserve.gov/econresdata/scf/scfindex.htm

Malkovich says

Who is buying this crap?

I’m wondering also.
There is no real return on money, except speculation or hide hot cash. When too much money chasing too little properties, makes every pig looks beautiful.
Everything is possible. As Google sold Motorola with 76% loss after a year or Mercedes-Benz wipe-out his cash on Chrysler purchase, or Japanese investors got burned on US RE investments in ’80.
When I was filling-up my tank with gas 3 years ago, I was thinking that this is the last time I am paying this price. Amazingly prices came back to the same level.

Here in dublin, most desirable properties cost 80-120Gs more than they did 2.75 years ago. If oaktown doubled in the similar time frame that these "hipsters" are even more delusional that they appear at first glance...

Don't forget that Oakland's home prices took a tremendous hit during the down turn. So it would make sense that the increases would be just as dramatic on the way back up.

Carolyn C says

Don't forget that Oakland's home prices took a tremendous hit during the down turn. So it would make sense that the increases would be just as dramatic on the way back up.

Um.... that tremendous down turn was a down turn from the biggest bubble in our history. Why would it make sense that prices increases as dramatically as it fell from a bubble???

Miike says

Why would it make sense that prices increases as dramatically as it fell from a bubble???

It wouldn't. Unless you want banks playing games with mortgage securities, going out of business, national downfall, yadda yadda yadda, apocalypse.

Oakland: come for the real estate, stay for the weather.

EBGuy says

Oakland: come for the real estate, stay for the weather.

And catch a bullet during evening stroll...

dublin hillz says

EBGuy says

Oakland: come for the real estate, stay for the weather.

And catch a bullet during evening stroll...

Oakland is not as bad as everyone makes it out to be. The bad PR comes from those that don't live in the area.

Carolyn C says

dublin hillz says

EBGuy says

Oakland: come for the real estate, stay for the weather.

And catch a bullet during evening stroll...

Oakland is not as bad as everyone makes it out to be. The bad PR comes from those that don't live in the area.

Shut it, you goddamn RE troll.

Oakland is one of the most dangerous cities in the US.

http://blog.sfgate.com/crime/2013/09/24/a-terrible-title-oakland-again-has-nations-highest-robbery-rate/

FunTime says

Please let's not fall victim to this idea that a market is called in two or three years. Talk to me in thirty.

This sums up the uselessness of the bearish advice on this forum. Who the hell can base housing decisions on a 30 year time horizon? And/or wait 30 years to see if the prediction is correct. He almost certainly won't be in the same house in 30 years.

Facebooksux says

Carolyn C says

dublin hillz says

EBGuy says

Oakland: come for the real estate, stay for the weather.

And catch a bullet during evening stroll...

Oakland is not as bad as everyone makes it out to be. The bad PR comes from those that don't live in the area.

Shut it, you goddamn RE troll.

Oakland is one of the most dangerous cities in the US.

http://blog.sfgate.com/crime/2013/09/24/a-terrible-title-oakland-again-has-nations-highest-robbery-rate/

I have a home in Oakland you idiot! And I am not a RE troll dumb ass. Man you are stupid. And yes I have kids.

Facebooksux says

Carolyn C says

dublin hillz says

EBGuy says

Oakland: come for the real estate, stay for the weather.

And catch a bullet during evening stroll...

Oakland is not as bad as everyone makes it out to be. The bad PR comes from those that don't live in the area.

Shut it, you goddamn RE troll.

Oakland is one of the most dangerous cities in the US.

http://blog.sfgate.com/crime/2013/09/24/a-terrible-title-oakland-again-has-nations-highest-robbery-rate/

You clearly are a pampered pansy afraid of your own shadow.

Malkovich,

I agree. Certain areas have doubled in prices since the bottom of the market. This 4-plex was foreclosed in August for $527k. Amazingly, it's pending for $730k as a REO . That's $200k spread. Even investors didn't think they could flip it for $730k. That was why no one bought it at the steps.

I wouldn't listen to your CPA's advice. If your CPA is any good, s/he would have a decent net worth and not be rented in a rent control area. If history is any indication, we have more room to run. How much more is anyone's guess. How would you feel about waiting for another 5-10 years for the next housing bottom only to see that prices are the same or even higher than they are now? How many more real estate cycles can you wait before you dropped dead? Being financially conservative cuts both ways.

I'm sorry for not being able to help you a couple of years ago when you reached out to me. 4%-5% commission was not worth the time and effort for me to research and help you buy these multi-unit properties in Alameda County. Had you looked for properties in Santa Clara County, I would have been able to help you out in a heart beat. On the bright side, you're making a lot more money now than ever.

In my opinion, now is not the best time to buy, but it's not the worse time either. I think home prices are at equilibrium to +/- 10%. No doubt some areas already sold for above peak prices, but interest rates are so cheap. They're more than compensated for the higher price.

Just put yourself in the investors' shoes. You bought whole bunch of properties at the bottom of the market. These properties have doubled in value, but your property tax basis was locked in at the bottom prices with 2% annual increase cap. At the same time, you locked in 30-year fixed mortgages between 3.75%-4.25%. Your primary residence is locked in at 3.25%-3.5% for 30 years. Give me a good reason why you would ever want to sell these properties when the tenants are buying you these houses and putting money in your pocket every month?

As usual, just my 2 cents. Good luck.

Homeboy says

Actually, more than doubled:

Haha...the fallacy of medians...keep believing.

E-man says

I'm sorry for not being able to help you a couple of years ago when you reached out to me. 4%-5% commission was not worth the time and effort for me to research and help you buy these multi-unit properties in Alameda County. Had you looked for properties in Santa Clara County, I would have been able to help you out in a heart beat. On the bright side, you're making a lot more money now than ever.

In my opinion, now is not the best time to buy, but it's not the worse time either. I think home prices are at equilibrium to +/- 10%. No doubt some areas already sold for above peak prices, but interest rates are so cheap. They're more than compensated for the higher price.

No worries E-man. I haven't found a place for lack of trying, believe me. There simply has been no inventory (RE multis) in my zip codes. I have submitted exactly 4 offers the last 2-3 years. I was out bid or, in one case, rescinded my offer.

I was also interested in another 3-4 listings but the listing agent either blew my agent off (never returned calls, said there was already a deal pending despite is being listed for sale for another month, etc.) or otherwise blocked any other bids to make a dual-agent sale.

I'm not giving up but it seems there is still a dearth of inventory and prices still going up. And now all this "Oakland is the new Brooklyn." Trying to stay optimistic and hoping something will come along.

Carolyn C says

Oakland is not as bad as everyone makes it out to be. The bad PR comes from those that don't live in the area.

I agree. I spend a lot of weekend in Oakland. Its like anywhere else. There's good parts and bad parts. The same holds true in SF.

edvard2 says

Many parts of Oakland I used to feel a little uneasy walking around in during the day now might as well be a West Coast Brooklyn: You almost trip over the hipsters around there.

So that's basically the deal. Oakland is now the new "cool" place to move to and now that this the word is out, it too, like the rest of the Bay Area will suffer the same soulless gentrification.

Is it soulless gentrification to be able to walk around in comfort? To me, a neighborhood getting safer is a good thing. I suppose I would choose soullessness over getting mugged, but they aren't mutually exclusive either.

JFP says

This sums up the uselessness of the bearish advice on this forum. Who the hell can base housing decisions on a 30 year time horizon?

An excellent illustration of the difference in approach to the issue. I would argue the other way. "Who can afford to base housing decisions on less than 30 year time horizons?" I didn't inherit any money, so compound growth over time is my only chance at having any. I'm not a bear. The math says that I'm better off renting in my situation. My situation is unusual, however, since I choose to live in San Francisco and we have such an usual cost of housing.

Carolyn C says

I have a home in Oakland you idiot! And I am not a RE troll dumb ass. Man you are stupid. And yes I have kids.

And this explains why you are saying crime is no big deal in Oakland, because you want your house value to go up. Oakland has worse crime than any other city in California (including Compton, Stockton, Richmond, and EPA). It is in the top 10 most dangerous cities to live in the entire U.S.

http://www.neighborhoodscout.com/neighborhoods/crime-rates/top100dangerous/

The time you spend covering up the problem would be better spent trying to fix the problem. And there IS a problem.

FunTime says

An excellent illustration of the difference in approach to the issue. I would argue the other way. "Who can afford to base housing decisions on less than 30 year time horizons?" I didn't inherit any money, so compound growth over time is my only chance at having any. I'm not a bear. The math says that I'm better off renting in my situation. My situation is unusual, however, since I choose to live in San Francisco and we have such an usual cost of housing.

If you think you know what is going to happen in 30 years in either your own life or housing, then you are seriously deluded. 30 years before now was 1984. How many people then, got even 1994 right? Never mind 2014.

How did you get the idea that I said crime is not a problem. Crime is always a problem. My intentions are not to increase my home value because I complement Oakland. My home has already increased in value since I purchased and will continue to increase. My opinion will not change peoples minds about the city. People will decide for themselves. And they are deciding that Oakland is a wonderful place to live, hence the prices. What really gets me are people like yourself speaking garbage about a city you haven't lived in. You don't know what it's like to live in Oakland. I do. Oakland is not as bad as the media makes it out to be. And it's the big mouth cry babies that are too afraid to walk past a black person that are screaming "Oakland is a big scary city and dangerous to live in". Keep your opinions to what you know, the suburbs.

Tom Hanks grew up in Oakland, Gerry Brown lived in Oakland, Suze Orman LIVES in Oakland. Who lived in your crap town.

I know exactly where Tom Hanks lived (it wasn't that long by the way). He lived a street up from a family friend of my parents who lived on Fair street off the Carson exit. Just below that it starts to get into the pretty nasty neighborhoods. A lot has changed since Tom lived there.

I agree that not all parts of Oaktown are that bad--I grew up going to church in Oakland every Saturday. I also worked in gangster rap, so I've been to the scary parts. And I can honestly say that I am very happy to be alive. I feel for the kids that have to grow up like that. There are plenty of people who grow up and live in Oakland that have never been to the flats, so they really don't know what those parts are like.

Cool! I'm sure it has changed a lot since then.

SiO2 says

Is it soulless gentrification to be able to walk around in comfort? To me, a neighborhood getting safer is a good thing. I suppose I would choose soullessness over getting mugged, but they aren't mutually exclusive either.

All the hipsters can now suffer the same lung problems as the locals who live too close to the diesel fumes.

I have been to the flats. And I am not afraid to go by myself. I am on the alert. No the city is far from perfect. There are so many different neighborhoods to choose from. But it's not for people that want perfection. If you want culture, diversity, variety, art, good food, social awareness, excitement, then Oakland is the place for you.

Carolyn C says

Oakland is not as bad as the media makes it out to be.

Writing about Oakland like it's one experience doesn't make sense. Same goes for most big cities.

I just had friends leave Oakland for another state. There were a lot of reasons, but it didn't help that their house had been broken into three times in a year, twice while their toddler was at home with a nanny, all four of their bikes had been stolen and their three cars were repeatedly burglarized.

I'm not writing that to say that's what it's like to live in Oakland, but, depending on where you live in Oakland, it can be.

BTW, I'm not the stereotypical San Franciscan who hates Oakland. Oakland is great! I like lots of parts of Oakland and love a lot of restaurants and concert venues there.

FunTime,

My home has never been broken into. So I can only share my experience. What part of the city did your friends live?

Most dangerous cities
http://money.cnn.com/gallery/real_estate/2014/02/03/dangerous-cities/index.html

What Oakland is doing on this list???

Carolyn C says

I have been to the flats. And I am not afraid to go by myself. I am on the alert.

And you are on the alert because...? Most cities you don't need to be on the alert to simply walk down the street by yourself, believe it or not. Perhaps you can't see the forest from the trees, but more likely you are simply an Oakland property owner shill trying to boost your house value, hardly an unbiased opinion.

My experience is that Oakland is not as bad as the media reports. Does Oakland have crime? Yes. Is Oakland the safest place in the world. NO. Is Oakland perfect? No. Does Oakland have a lot to offer. Yes. Please tell me what city in America is crime free. I met a lady that was held at gun point in San Ramon Rite Aid if I remember correctly along with others. The cashier dialed 411 instead of 911. So the lady said she ran out of the store because she knew help was not coming. The men chased her down and kicked her badly for running. She was suffering from health problems at the time. I met this lady in 2007 just after I moved to San Ramon. I was shocked that this happened in San Ramon. Crime is everywhere and you are kidding yourself if you think you are perfectly safe in any community.

Carolyn C says

Don't forget that Oakland's home prices took a tremendous hit during the down turn. So it would make sense that the increases would be just as dramatic on the way back up.

That assumes that going back to the bubble highs makes sense. I am not sure I buy that premise.

Miike says

Um.... that tremendous down turn was a down turn from the biggest bubble in our history. Why would it make sense that prices increases as dramatically as it fell from a bubble???

Exactly.