Home Buying in 95014>Question Details

Mountain Rain, Home Owner in 95014

Good Buys in Bay Area Residential Investment Property

Asked by Mountain Rain, 95014 Tue Dec 16, 2008

Hi Professionals,

What are some of the good areas to buy residential investment properties in bay area? say, under $350k? I'm looking for 2 things: below the market purchase price, and easy renting. How about north Sunnyvale, north Mountain View, south San Jose, etc.? Where can we get good bargains with good renting potential? Hope I'm not asking too much.

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Michael Cheng’s answer
First, dispel the notion of getting something below the market price, unless you're seeking a deal that's not an "arms-length" transaction. In this market, if you're closing a deal, you've just paid the market price.

Second, you'll need to discuss your needs with a financial advisor so she can understand your definition of "good".

Strictly speaking, property investors don't chase illusory concepts like "bargains" or "easy renting". At my firm, we work with property investors who look for quality and industry benchmark cash-on-cash returns, not just a property that merely returns a positive cash flow. So, as long as the property is within the investor's financing capability and generates the proper rates of return, it's a good deal, simple as that.

Of course, the devil is in the details. You'll need to account for multiple factors like current rents, expected vacancy rates, maintenance costs, utility expenses, management overhead, etc. Start looking for properties that meet those criteria or seek assistance. Professional advise is much cheaper than lost income and opportunities learning from the school of hard knocks.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Mon Jan 10, 2011
Mtn Rain -

As others point out it depends on what your objective is with the particular investment. With that said there are some great opportunities downtown San Jose, East San Jose, Berryessa, and of course South County. Under the 350K price point, I think downtown is the best opportunity because of the college and the fact that many lots have R2 zoning which may allow for a second rental on one lot in the future.

I am happy to help you evaluate different options. No-obligation.

CJ
Web Reference: http://www.TalkToCJ.com
1 vote Thank Flag Link Tue Dec 16, 2008
The great bargains are definitely in South and East San Jose, but not necessarily would make for great re-sell or renting potentials. You can find some good bargain in Sunnyvale, Mtn. View, and also in Santa Clara. There are more demands for homes in areas surrounding big companies like HP, Google, Yahoo, Lockheed, Cisco, etc. Also, consider areas within good school districts and large shopping areas. Buyers and renters alike look for conveniences, so consider those options when buying your investment home.

There are definitely some good bargain for under $400k, but you will have to decide what is important to you (i.e. large home in ok neighborhood or smaller home in good neighborhood?).

I'd be happy to give you my professional advice on what makes a great investment purchase for you, based on your expectations and your goals for the future. Would you like to meet to discuss this?

Feel free to call me anytime if you have questions.

Vicky Le, Realtor
Intero Real Estate
Office: 408.342.3085
Email: vle@interorealestate.com
1 vote Thank Flag Link Tue Dec 16, 2008
Hello Mountain Rain,
Couple questions:

1) What's the goal? Cash flow? appreciation? Both?
2) Have you owned rental property before? Are you going to get professional management?

It's really easy to lose money in income property if you don't have great support. Also, not sure whether you are a beginner of a seasoned investor. It really is a business and you have to go into it with a solid business plan.

I am not a big fan of east valley - even though they cash flow with 20% down. I do like downtown. The values are good and there is much redevelopment. I also like some areas of Sunnyvale and Mtn View along 82. South San Jose is always a last resort for me - even though I went to Santa Teresa High :-) The numbers work but the rental market is soft.

I do have a bank owned duplex coming up on 10th street. It should cash flow with 20% down and it's in the path of growth. If you are new, it's a great place to start.

Rebekah
1 vote Thank Flag Link Tue Dec 16, 2008
Hi Mountain Rain,
Some areas with good renting potential are:

Northern Sunnyvale (as you have already mentioned) - close to major high tech employment (AMD, National Semiconductor, etc.)

Mountain View - convenient to the South Bay and the Peninsula, and of course software companies in Mountain View itself,

Berryessa/Milpitas/NorthValleySJ - convenient to high tech employment near Montague/Tasman/North1st (Cisco, SanDisk, Altera, Cypress Semiconductoer, etc.)

Added bonus to Berryessa/Milpitas/NorthValleySJ - close to Ranch 99, McCarthy Ranch, Mayflower, Great Mall, Walmart, etc.
0 votes Thank Flag Link Sun Dec 12, 2010
There is a home I really like on Holly in San Jose 95127. It's had some remodeling, listed for $319,000, and feeds to Piedmont Hills High School (a very desirable high school).

Nice areas of Sunnyvale and Mountain View are still priced in the single family residence above your parameters. Most REOs listed around $400K in Sunnyvale are gone as soon as they get on the market (note a home on Santa Paula last week).

I would have caution with South San Jose, although you can quite literally get into Evergreen/Silver Creek below $200K. One home went on the market near Eastridge Mall last week for $179,000. Good floor plan, three bedroom, two bath home with RV parking but real close to the mall (needed a new kitchen). With $36K down, that's about $850 monthly payment. You cash flow right away.

What I look for is decent schools and safety. There is a great crime locator for the city of San Jose where you can type in the address and look at the amount of police calls (and sorts of calls). This provides some good information when braving some of the lowest priced neighborhoods.

http://www.sjpd.org/CrimeStats/CrimeReports.html

Anyhow, I really like North San Jose and Milpitas and we are starting to see pricing that does cash flow with a 20 percent down payment like the home on Holly, mentioned in the introduction.

Let me know if you would like more help!

Erica M Nelson
EricaNelsonEstates@gmail.com
408-416-7090
0 votes Thank Flag Link Mon Feb 23, 2009
There are so many opportunities available to you throughout the Silicon Valley. Though if you are looking for properties in Sunnyvale and Mountain View you will most certainly have a hard time finding this price range. As for areas farther out there are plenty of homes available, with some REO's and short sales under market. I would suggest having you meet with a Realtor that specializes in REO's and Short Sales, and is well versed in rental/income investment properties. If you have any more in depth questions feel free to contact our team. Good Luck house hunting!
Warmest regards,

BOYENGA TEAM
Silicon Valley Investment Specialists
Intero Real Estate Services
Office: 650.947.4645
JANELLE: 408.373.1660
ERIC: 408.506.3942
Email: Homes@Boyenga.com
Website: http://www.Boyenga.com
Website: http://www.MlsTools.com
"Proven Results through Teamwork
Web Reference: http://www.creonline.com/
0 votes Thank Flag Link Sun Feb 22, 2009
Assuming you wish to rent to Silicon Valley workers, you need to know where the jobs are. Most are north or NW of San Jose Int'l Airport. People who used to live away in far outlining areas are kicking themselves 'cause of gas price and loss in real property valuation.

Monday I was asked to manage a property in good part of South SJ, I was surprised how many homes were
available for rent. There were 3 rental homes that I was even involved in selling (no dice) are still looking for someone paying the mortgage. Many are offering incentives like 1st month rent for free etc. If you wish specifics please contact me directly.
0 votes Thank Flag Link Fri Jan 16, 2009
Hi Mountain Rain:
To buy a residential investment property that would have a good potential of gaining value and price less than $350 I would only recommend Down toen San Jose. you have to buy a REO home and you may have to spend around $30K on it.
I just went into contract for a Single Family home in Down Town (North of 280) for $250K. I am sure it can be rented for over $1600. There are more homes like that out there. Go and get them!
0 votes Thank Flag Link Tue Jan 13, 2009
MR: please consider speaking with your tax advisor/CPA to discuss what type of residential investment makes sense for your financial situation, if at all. Your tax advisor/CPA should have a preferred mortgage banker and Realtor that can help you execute the strategy developed (these three people should all be on the same page as far a strategy and plan). If you need a referral for a tax advisor/CPA feel free to contact me offline.

Best Regards, -Steve
0 votes Thank Flag Link Tue Dec 23, 2008
You are mostly out of luck on the first two places mentioned because a client asked the identical question this week. There is 1 fix-upper home facing 101.

South SJ- there are bargains out there but each neighborhood is different. Do you like McKeon, Kay homes? Arcadia & Ponderosa homes have not dropped that low yet.

Dec 18 (Thur)- I visited an office on Almaden X-way chatted with sev. agents. They showed me the chalkboard with ~20 homes sold in Blossom Valley/S. San Jose. The price sold a fraction what they went for in the mid 90s. They sort like what homes were sold in the late 80s. Bernal (MH School district) is now a depressed area but the rent remains the same. Hitachi(old IBM campus) will be dotted with high concentration condos and there will be enough jobs to keep home price going up. I would avoid Senter/7 trees etc.

My advise is Blossom Valley, Santa Teresa areas. Too much yard work ? Look for a town home.

The tax benefit should be substantial assuming you are in 25% or higher tax bracket.
0 votes Thank Flag Link Fri Dec 19, 2008
Hi Mt. Rain,
My name is Allyson, By your discription you would do well with purchasing an REO. I do specialize in bank owned properties and have extensive experience in helping buyers purchase REO'S. Also I know and have worked with most of the REO Agents, and that gives my buyers an added advantage because they alert me to pre-market REOs. The areas you have chosen have some very nice and not so nice REO'S, but the prices are right.! Your price range is definitely doable and as the other agents so rightly pointed out it depends on your investment objectives.
Now is the time to REALLY look because inventories are still high and Banks are looking to close deals NOW. As you have seen, the interest rates are very low.
I have the experience you may be looking for. I have a web site where you can check me out and if you would like to put in a search just for bank owned properties it's FREE!
You can check out my web site at http://www.homesbyallyson.com and set up your search or just email me with your needs and wants: what price range and areas you would like to search in and I will set it up for you. You will receive up-to-date listings as well as any changes in price or status.

If you need any assistance or questions anwered feel free to email or call me.

Sincerely,
Allyson Alessandrini
(408) 705-6578
allyson@homesbyallyson.com
0 votes Thank Flag Link Wed Dec 17, 2008
You are not asking too much. In fact, you are asking just right!

I say Brentwood and Mountain House. Both have been crushed and have very good possiblities when the market shapes up, especially Brentwood.

Contact me if you are interested in learning more and going over in detail what I can do for you.

TA
0 votes Thank Flag Link Tue Dec 16, 2008
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