patrick.net

Nomograph says

Irvine is full of people who are frightened of their own shadow, so it’s no wonder Captain Fantastic is terrified of Oakland.

My one visit to Irvine was a business trip. Took a ~2 mile walk to get dinner and was AFAICT the only person in Irvine not driving a car (until I saw a couple of bicyclists on a path down by a river, eventually). I know LA loves their cars but this was ridiculous. The reaction of the gate guard at Blizzard when a bunch of engineers showed up walking the next day was also interesting. Though to be fair, they seem to have groupies hanging around their campus so I can understand some caution being in order.

Mr.Fantastic says

It’s laughable that anyone would even compare Oakland to Irvine. Oakland is the murder capital of California. Irvine was rated #23 on the top places to live in the U.S by CNN.

Actually it's #22 and it's from Money Magazine. Behind some of your other favorites, I'm sure--Fishers, IN (#8), Ames, IA (#9), Carmel, IN (#14), Shawnee, KS (#17). Maybe if you keep promoting Irvine it can climb above Missouri City, TX next year. Something to strive for!

I often comment that I think Oakland is to SF as Harlem was to NYC. 20+ years ago, you'd have to be nuts to own property in Harlem. Now you have to be rich.

For fun, go to Redfin and punch in Oakland, and search for SFH under $200k. Amazing how many there are, isn't it?
I've thought about it, but for many of the reasons listed, I would never buy rental property (or live) in Oakland.
Rockridge and Piedmont are nice, but that's not Oakland.

Random fact about Oakland: The people who live in the hills routinely leave their car doors unlocked so that when their cars get broken into, the windows will at least not be broken. And of course nothing left in the car. Even in the hills there is some crime. Just something to plan for.

No...Oakland Hills residents DO lock their cars. :) We're professionals, not idiots.

Rockridge and Piedmont ARE Oakland. That's the whole point. Claremont Hills, Montclair, Temescal, Piedmont Pines, Trestle Glen, Broadway Terrace---all Oakland. Wonderful places and wonderful to live, work or dine in. The common practice is to say any part of Oakland that doesn't fit a preconceived notion about it is not Oakland. Or others say that Rockridge is Berkeley (and it's not). Realtards invented something called "Berk-land" to pretend the RE they're selling isn't in Oakland. But it's some of the best places around.

Nomograph says

Agreed.

Oakland is a vibrant, diverse city with great wealth in the hills, great poverty in the ghetto, and everything in between.

Irvine is a boring, homogeneous community of condos and attached townhomes that appeals to people who are afraid of their own shadow. There aren’t even any independent restaurants or stores; the Irvine Company only rents commercial space to corporate chains. Enjoy the Olive Garden!

I agree!
HA West Oakland May just be the Next Harlem.

How Can you even compare Irvine to Oakland. they should never be used in the same sentence.
two different types of folk live in each. Irvine people seem to be dieing a little bit more every day (on the inside ) there sole being suck out through eyes living in a fake world with fake thoughts. ha ha OK that was harsh.

Oakland is a place where anything seems possible. all peoples and cultures seem to click.
the diversity is such a lift IMO. So many different ways to make a living and a life for ones self their, Very broad range of different work and skills needed all through out the city

other pluses for Oakland

First Bart stop from The City (SF) and great freeway access. But you really don't need a car.
Laney College is great and right there.
hmm what else.

Oakland IMO has the best weather year round out of any city in Nor Cal San Jose may be in there but it gets hotter in the summer
Best Place to live in a warehouse IMO (mildish year round temps most of the time)

great clean tap water
Yoshi's Jazz club
Laney swap meet
super Bike friendly city
better and cheaper eats than the city IMO
serious arts happening In Oaktown
serious in your face cultural events all year
easy parking for a city its size.
easy airport runs
and then SF is right there too
Plus all the other Bay area Perks Hello!!
Oakland Rocks!

I'll be back.

negatives exist in any city the size of Oakland IMO

I spent some time doing landlord/tenant work at the legal aid clinic in law school, and let me tell you, there were people in units for *extremely* long periods of time without paying rent, some of whom later fought eviction (some successfully) based on minor code violations or violations they caused themselves (leave rotting food on the floor, cockroaches arrive, then claim the landlord is responsible and that your failure to pay rent was in response to his failure to deliver a habitable residence, etc.). Do the math - would your proposed business still work out if you only collected rent three quarters of the time? Half the time? With lots of pest control and other maintenance expenses caused by tenants who couldn't care less if the place burned down as long as they made it out first?

Landlording in general is not for the faint of heart, and landlording in the ghetto is risky both financially and to your physical safety. You've been warned.

Oh come on now, turnovers notwithstanding it was joyful watching them nail Denver...

Mr.Fantastic says

Why is it everyone who likes Oakland seems so uber-sensitive about criticism about the city?

When you have the highest murder rate for cities over 200,000, a piss poor public schooling system, and one of the highest unemployment rates in the state, you tend to attract negative press.

Because it's just drug dealers killing drug dealers, still not cool but if you're not selling on the streets, you're OK.

The Public school system problem is not just an Oakland issue.

Just for the record, I happen to like Oakland too I just wouldn't want to be a landlord there.

That's why those areas show up as green on Patrick's map. It means you essentially have to pay people
to buy a house there.

Mr.Fantastic says

I thought we came to the conclusion, if you’re black and live in the flatlands, watch out for the bullets. Otherwise, you’re a-okay!

No, we did not. You just chose to cherry-pick and misinterpret. Of course, there is generally more crime in poorer communities throughout the States. (GENERALLY!!) This is due to racism, class and income levels. This is not my opinion, but pretty well-documented socio-economic pressures that seem to plague black communities more than others.

In the case of Oakland, I was merely pointing out that these also have a weird history, especially as relates to white cops, that dates back for almost a century. History that includes importing racist southern cops to brutalize the black transplants, a history of police brutality by a disproportionately white police force---an environment that spawned the Black Panthers.

Of course, I listed tons of other reasons, but you've chosen not to misrepresent those. For that, I'm thankful or disappointed you didn't read them. I'm not sure.

And, for the record, I don't think any Oakland defenders are uber-sensitive about valid criticism, we just all think you're incredibly wrong and talking out of your bung. :)

Figures lie and liars figure! :)

Now, where are you getting the 20% from?

And the violent crime rate is just because Irvine keeps dumping their bodies here!

Im not sure about Oakland because I do not know the area but to me being a landlord is pretty universal. In my experience it is often more of a headache than its worth. Renters tear up your property and are usually high maintenance. Ive had some good ones over the years but the bad ones far outweigh the good ones. With property values where they are your better off buying a single family residence. Owning a business is stressful in itself why add more of a burden.

I had lived and worked in Oakland for more than 15 years. Being a landlord in Brentwood makes more sense.

I take back what I said earlier about not being hedge against inflation.

Since you're renting and you're rent will probably go up. It makes sense to lock in the fixed
payment if you buy the duplex where you can live in one side.

If you can potentially live there as an alternative to renting, that changes a lot.

Thanks all for your replies. Definitely going to think very long and hard before I make any moves.

Not boasting at all, but I'm the type of guy who makes money or breaks even when selling cars and whatever else because I take a long time to learn the value of things, buy at the best price, and try not to purchase when in an emotional state. I am also a big saver and live well beneath my means. I am hoping these things will help me in this foray into real estate investing.

Though, without question, I realize buying a rental and being a landlord is much much more complicated then buying a used car. Which is why I am trying to find out all I can about it.

An aside: Does anyone know of a site or group that focuses more on rentals? It seems Patrick.net is more SFH-oriented.

In any event, yes, I am aware of the tenant-centric laws in CA and Oakland. I think rent control is the biggest bunch of BS ever but it is something you have to deal with. I have to look into this more, but I understand that unincorporated areas of Oakland aren't subject to Oakland rent controls and regulation.

To repeat myself in my original post: I've seen a number of properties, three and fourplexes, where having just one unit rented would cover the PITI. Obviously these would be the safest investments. And, yes, being a landlord is probably more work and stress than I can imagine. A friend of mine has four props in east Oakland and he says he has the best luck when he puts the "For Rent" signs in Spanish.

I think my biggest worry right now is buying something in the next few months and then seeing values on multis decline even further. Unless I am missing something, I don't see rents going down anywhere in the inner Bay Area.

At this point, I am leaning more towards a pure investment rental instead of a residence (though I would "reside" there for purposes of a loan) and just continue to house-share in San Francisco.

I welcome any more comments about this topic!

Malkovich says

At this point, I am leaning more towards a pure investment rental instead of a residence (though I would “reside” there for purposes of a loan) and just continue to house-share in San Francisco.

Another crook looking at mortgage fraud.........I hope that you get caught with this little scheme of yours because this is bloody despicable. Think twice before you sign the initial paperwork that the loan is for an "owner occupied" mortage loan with the admonishment "I/We fully understand that it is a Federal crime punishable by fine or imprisonment, or both, to knowingly make any false statements when applying for this mortgage, as applicable under the provisions of Title 18, United States Code, Section 1014" and that all fraud is investigated by the FBI and local authorities.

Thanks for the comment lurking but if you want to preach, there are some far bigger targets. How about all the corrupt corps and govt that I pay a crapload of taxes to?

I think your malice is misdirected, friend.

I'm curious, what is it about this common practice that bothers you so much to resort to caustic name-calling? What about all the "crooks" - the brokers, agents, and greedy buyers and no doc loans - that caused this bubble in the first place?

Whom, exactly, am I hurting if I take out an owner occupied loan to buy some craphole rental in east Oakland in the hopes I may have some money in my retirement years?

Not sure what your problem is, bud, but something tells me you have a lot of them. Hope you can get some help.

You're hurting the bank. (And surely only the bank! How could there be any fallout from that?) More favorable rates are granted to owner-occupied units because the risk is lower. Owner-occupiers treat their housing assets differently from investors, and are much more likely to stretch to avoid default. Qualifying on a false premise like that is fraud. Full-stop.

Your absurd argument that "there are bigger targets" holds moral weight like rice paper: every criminal has someone they can "look up to" in this sense, but we don't give them all a pass on the grounds that the Fuhrer is safely in his grave. Calling lying about owner-occupancy a common practice (even positing that this is true) is equally convincing --you might get the same response from a looter during a riot. How many flat-screens does he need to take home to ensure some money in his retirement years? Let's all cheer him on.

There are many morally gray things in this world, but what you're proposing is not one of them. I think people here --who understand the connection between the the mortgage market and the broader economy-- understand this better than most. If you do what you're suggesting, I join lurker in hoping you get caught.

I had to laugh out loud when I read "you're hurting the bank." Pure comedy gold. My credit is in the low 800s, I've never missed payment in my life, and could write a check for the properties I am considering. Believe you me, I won't be any risk to the poor widdle banky wanks! :)

Clearly lurker and yourself are on higher moral ground than myself. I'm sure you've never exceeded a speed limit, told a white lie, or rounded up a number on a credit card application. Best of luck to you in life but your opinions are meaningless to me and I have zero respect for people/glass house/throwing stones.

In fact, considering how absolutely corrupt the world is around you I'm surprised you haven't donned some white Nike tennis shoes and decided to seek the next level in human consciousness!

Now, let's get back on topic. To anyone who has a problem with my earlier statement about the possibility of getting an owner occupied loan and possibly not living there in the entire year required as per the terms of the loan, the pious luker and msinus have made their misgivings known and these are noted.

No risk my ass. You're a noob landlord. There's an excellent chance that you'll screw up and wind up with an unprofitable investment. That's why you're here. And we both know California is a non-recourse state. I imagine that the world is sufficiently corrupt that you'd have no qualms walking away if you were losing money and underwater.

If you were an owner-occupier --as you plan to represent-- the utility of the unit wouldn't vary with market conditions. Risk incorporates factors other than your affluence and credit score.

Malkovich, I'm curious - why misrepresent yourself as an owner occupier to the bank then? To get a better rate perhaps? How is that not hurting the bank? You are getting a better deal from them through deliberate misrepresentation - I don't know how you can deflect that this is textbook fraud.

Consider the following. If you had advertised a special deal for little old ladies on rent, half off, and then it turned out a little old lady rented a unit for her gangster grandson, would you feel defrauded? How about if someone signed a lease they had no intent of ever paying a dime on and then moved in and refused to leave - they're making a misrepresentation and then you're getting less money than you planned. Any problem with this?

I am clearly in the wrong website. Please disregard I ever posted here and keep your pretty little heads in the sand dearies.

Apparently there are some bitter people here who have a problem with a self-made man.

Msinus - I may be a noob landlord but I dont. F. Up. Ever. That is why I am in the position I am in. And that position is sitting pretty with a lot of cash and running a successful business that has doubled revenue every year. If that bothers you in some way, makes you envious, makes you want to get on your high horse and preach to me, that is your problem. Not mine.

JimAtLaw - if you are in fact, an attorney, it is surprising to me that you would try to present some scenarios to explain the moral dilemma with this scenario, seeing as an attorney's goal is to exploit the letter of the law for his (and his client's) gain.

I asked a few simple questions here and all I have received in answer is a debate about the merits and faults of Oakland and some idiots chiding me about my morals in in regards to what type of mortgage I should get in order to purchase a rental property.

I won't be visiting this forum anymore because, as is the case with most un-moderated forums, there seems to be a number of mentally unstable individuals here who have nothing better to do with their time then scold and preach to others.

Gentlemen, have your fun with some other scofflaw as I will be searching for other, more intelligent discourse on some other site. I am done with the useless forums here as it clearly is amateur hour 24/7.

I appreciate the article submission aspect of PatNet but, sad to say, the more vocal forum members here are simply lonely, old, friendless bastards with nothing better to do than chide others regarding their moral boundaries.

Ta ta gents. I will be meeting a lovely woman in an hour for a scrumptious meal at one of my favorite restaurants. And, let me tell you, I won't be wasting my or anyone else's time by taking aside the owner of the restaurant and scolding him for all of the undocumented employees in the back of the house preparing my meal and serving me and my companion.

Good night and good bye. It's been a fun few moments ridiculing you mental midgets but I must continue my quest for information, wealth, and happiness. May I suggest you put aside your petty bickering and do the same. Ciao.

Malkovich? Malkovich, malkovich malkovich malkovich, malkovich malkovich, malkovich malkovich.

Malkovich malkovich.

Malkovich,
Malkovich

The problem, Malkovich, is that you're not talking about trying to "exploit the letter of the law" - it sounds to me like you're talking about fraud. (And you are not my client here.) Given that pervasive fraud contributed heavily to the current state of the housing market and the economy at large, I would think you might understand why folks would be sensitive about it.

I don't think many here have a problem with a "self made man" - more power to them, and to you, if that's what you are, and by legitimate means. (It's the internet, so you may be my dog, he's been in the bedroom with my iPhone for a suspicious amount of time now...)

But many of us *DO* have a problem with criminals, and with people who screw others for their own personal gain. Sounds like you're in that camp already, or considering joining, and after at first discussing the potential issues with landlording in general and Oakland in particular, you got angry and resentful that some of us have questioned your apparent plan to defraud your bank. Awwww, poor you, so oppressed!

Go ahead and continue your quest, it's obviously not like anyone here was going to convince you otherwise, but don't say you were never told - lying on your mortgage application is illegal and immoral and if bad things come of the transaction after that, you would deserve every one of them. I'd suggest going with a duplex and living in the other half at first, which would put you much closer to the tenant and able to keep an eye on the place and maintain it without travel time, etc., and hopefully not require you to start with an act of fundamental dishonesty to get in. This would also build experience for you and with any luck help when it comes time to finance the next one later as a rental.