Rehabbing in Bay Area

Rehabbing, Fix and Flip, Rental Properties
1

Hi,

Anyone have any thoughts on rehabbing in the S.F./Bay Area?

My thought was to try and buy out of state to make some passive income, but I’ve become uneasy with the idea of not being able to control the property. I’ve also been considering the following: taking 200K (from the sale of two previous California property sales) and securing a fixer in/around Berkeley with no money down and interest only payments where I would live in and rehab for one year, then sell and repeat. I figure because of my excellent credit, owner-occupied status, and cash reserves the loan should be competitive and if I could find a good property for rehabbing where I could do most of the work (I have a father-in-law as contractor for backup), I could stand to be in a good situation. I would finance the project with the cash on reserve, while keeping my day job.

My real concern is getting swept up in bidding wars for lousy properties that exceed 500K! Does anyone have thoughts on this approach, or should I consider another strategy?

I look forward to your responses!

2

I live in So Cal also, one thing I do to avoid paying sky high prices, is drive around the “older” parts of town, find an old or damaged house that looks awful and empty…talk to the neighbors find out who owns it and offer cash in the 140-160K range…it saves me a ton of money in agent costs and the risk of the agents bumping the price of the house up.

3

If you can do the work fairly quick I would. We just picked up a house for 600k homes in the area range from 750-1mil it needed 20k in repairs mostly roof costs. We only had one other person bid on the property. This was in Campbell just outside of San Jose. I think the bidding wars have cooled it might have been a fluke but not the same as last year or the year before.

4

What are the comps on these properties you are picking up for 140-160K?

5

280-300K