August 25, 2008

“wave good bye !!! renting days will be over”

727 Elm St, Redwood City, CA 94063 MLS# 80817142 – Property Details

$579,000

* Status: Active
* Bedroom: 2
* Bathroom: 1
* Year Built: 1939
* Lot Size: 5000
* Square Footage: 810
* List Date: 6/23/2008
* Garage Spaces: 1

Great oppourtunity for all buyers!!!NOT A SHORT SALE wave good bye !!! renting days will be over when your clients invest in this cute rancher home!! it has bonus room in the back With it’s own Bath , also bunus room in garage area. Perfect for an in law!Great Location!!!

That’s right ladies and gentlemen! Be prepared to wave good bye to your renting days because once you buy this home, this excellent oppourtunity for all buyers, you will be set for life.

The bunus room for your in-laws is a dream for most – honestly I can’t think of why you wouldn’t want to spend $714 per square foot for this fine fine house. Heck, you could rent it out! Boom instant passive income!

Garage? Bah! Who needs that.

This is really like buying one house, and getting a bonus condo! What’s stopping you now?

Comments (68) -- Posted by: burbed @ 5:02 am

68 Responses to ““wave good bye !!! renting days will be over””

  1. sonarrat Says:

    7/3/2003 $446,000 Grant Deed Resale Huerta, Carolina & Albrto M Sainz, Yanet 255383907

    It’s not a short sale yet, but it will be! One block over from Cassia, the site of 2007’s one homicide but normally a pretty good neighborhood, close to downtown RWC. Fairly quiet street that only runs a block and a half. The lot is the reason for the price, but it’s still overpriced by about $250K.

  2. bob Says:

    This appears to be yet another ad written by someone with a 4th grade grasp on grammar. As far as saying goodbye to renting, they might as well mention saying goodbye to saving money period since the mortgage on this teeny dump would be $ 3,378.89 a month. That versus the $1,500 it would rent for.

  3. nomadic Says:

    sonarrat – does that mean the mortgage balance was $446,000 when they went into default? That’s also what they paid for the place FIVE YEARS AGO according to Redfin!

    Another interest-only loan bites the dust, eh?

    BTW – price has already been lowered to $549k – still too high! But technically NOT a short sale since the owners would still make a profit at that price. They could get $469k and break even, which is really what they ought to be praying for.

  4. sonarrat Says:

    It will be a short sale because the comps are around $400K.

  5. rick Says:

    Frankly even 320k seems to be overpriced. But this is the RBA (or really?) and people love to overpay for a closet.

    Look at how “big” the door is, now you will be living on the left with a “huge” window and your kids on the right. You can all squeeze in front of the doorway for dinner.

  6. DensityDuck Says:

    Bunus room, excellent for baking buns to sell to the “freelance construction contractors” waiting outside Home Depot every morning!

  7. nomadic Says:

    There’s an 1815sf “mansion” on the other side of the block (Cassia) listed for $428k.

    Bizarrely, a 3102sf house sold at 720 Elm in 2005 for $894,500. Quite an eclectic neighborhood!

  8. anon Says:

    What an adorable little turd! I think a nice mid level manager or director would love to have this home for their children. Has this sold already?

  9. rick Says:

    Obviously that “mansion” is from a short sale or someone who has enough equity to offer a lower price. But this is a “refuse to short sale” house, which is quite unique, and you should pay 100% more to win it, the owner is as tough as Michael Phelps, which makes it very special.

  10. madhaus Says:

    sonarrat, that’s the sale in 2003, then the same 2 parties have another deed in 2006 with Bank of America. Can’t tell if it’s a refinance or a different house because San Mateo’s recorder’s office makes it danged difficult to tell. There’s nothing logged by that property (APN) number in either PropertyShark or the San Mateo Recorder’s Office after the 2003 sale.

    The taxes are current (almost $5000 for this place).

    Check out the photos of the place. The second bedroom is an eyecatching mix of magenta and bright orange. Ouch, it hurts. Also, most of the shots are overexposed with light spilling in so you can’t see the windows themselves.

    Redwood City 94063 has never been RBA.

  11. rick Says:

    I wonder what kind of management class people live in this neighborhood: 3% of the population makes more than 150k, 75% less than 75k. And the schools, wow, a great leap forward from 560 to 720 in the last 3 years, you know, every management class people wants to get into this neighborhood. Just think about the kids!

  12. nomadic Says:

    rick, the 1815sf “mansion” was purchased for around $140k so you are correct, the owners can afford to be realistic with their asking price.

  13. WillowGlenner Says:

    this is in one of the marginal areas where I like to buy- this house is worth maybe 400K. It might go as low as $360s or so but that is the bottom, because the rental market supports any valuation under 450K. This place is too small to rent for much but anything can rent in this market. Its all about lot size when you buy a property like this and this is a dinky lot and dinky house so not much going for it. This type of marginal house in a non-east bay or non-east san jose ‘hood is selling at 2000 prices- NOW.

  14. becky Says:

    The bunus room is where you keep your rabbits! pets or meat!

  15. pussycat Says:

    WillowGlenner – Your recent posts mention how the rental market these past few months make your investment properties cash-flow positive. I must ask though: are you expecting to sell them as soon as you’re no longer cash-flow positive? It is my opinion that the current rental prices aren’t sustainable, only a reflection of future homeowners holding off purchasing a house. If the rental market comes back down say to 1999 levels in a couple of years, that’s too short of a time to re-sell your investment properties yet you would no longer be cash-flow positive, so you’d be in a bind stuck with overpriced property. What’s your contingency plan on that or do you think it’s highly unlikely to happen to you?

  16. DreamT Says:

    pussycat? Ah this madhaus…:)

  17. sonarrat Says:

    this is in one of the marginal areas where I like to buy- this house is worth maybe 400K. It might go as low as $360s or so but that is the bottom, because the rental market supports any valuation under 450K. This place is too small to rent for much but anything can rent in this market. Its all about lot size when you buy a property like this and this is a dinky lot and dinky house so not much going for it. This type of marginal house in a non-east bay or non-east san jose ‘hood is selling at 2000 prices- NOW.

    I wouldn’t mind buying in a marginal area either – like San Bruno’s Tanforan Park or San Francisco’s Silver Terrace (see the Burbed article on 2166 Revere), both of which fall into the same category with this part of RWC.

  18. rick Says:

    WG will probably put in 50k and add on 800 sqf. :) That would worth 400k.

  19. madhaus Says:

    rick sez: WG will probably put in 50k and add on 800 sqf. :) That would worth 400k.

    I dunno, it only costs about $400 to buy one toolshed at OSH. Just bolt 4 of them onto the back of the house. Paint will be another $500.

    Can’t be any less inviting than that “bunus room” in the garage.

    becky, +4 for the Roger & Me reference.

  20. Taxy McTaxandspend Says:

    @sorrant

    It’s actually a horrible neighborhood. It’s on the wrong side of El Camino. In RWC, you generally want to be to the west of El Camino. Even then, the blocks between El Camino and Hudson can be dodgy. It’s not until you start getting west of Hudson do things start to really improve.

    Hudson is especially nice, though. It’s lined with large, old custom homes (mainly craftsmans and victorians) and large lots. I was really close to picking up a probate sale at Hudson and Brewster in 2005. It was way under market, but I just couldn’t stomach taking on the amount of work it required.

  21. nomadic Says:

    Here are some sobering statistics from a Forbes article dated 8/21/08:

    Zillow’s research of second-quarter sales and earlier selling prices showed that 48% of San Francisco metro homeowners sold at a loss and that 20% of overall sales were within a year of their last purchase.

    Of course, it’s important to note these are metro area statistics. In San Francisco’s case this includes Oakland, where prices have dropped 35% over the last year, based on Trulia.com data from California’s multiple listing service.

    OUCH!

  22. Pralay Says:

    Wow! This home is full of bonus rooms. Bonus room here, bonus room there.

  23. Pralay Says:

    Perfect for an in law
    ——–

    It seems the agent took the concept of in-law house in literal sense. Yes, you can invite your in-law you hate most and dump him/her in your backyard room. And it has its own bathroom, so you don’t have to share your own bathroom with him/her.

  24. madhaus Says:

    Pralay sez: Wow! This home is full of bonus rooms. Bonus room here, bonus room there.

    No, it said bonus room out back, bunus room in garage “area.” Which could very well mean the driveway.

    Maybe a bunus room is what you need if you have bunions.

  25. anon Says:

    If memory serves, Bunus is a city in France. How wonderful, its like you’re buying multiple towns – all packed into a single 800sqft home. As far as special homes I bet this one is the mostest specialist.

    I love it “wave good bye !!! ” Like a parent says to a child who doesn’t know any better. Bye bye now, owner’s credit rating! Bye bye dreams of millionaireism!

    Who knew buying an over valued piece of trash wasn’t the road to riches?

  26. Herve Says:

    > If memory serves, Bunus is a city in France

    Did you really know that or did you just check on Google? If you knew you don’t deserve to be called an anon: I just checked and there were 140 inhabitants in Bunus in 1999, not quite enough to qualify as a city :-)

  27. anon Says:

    Lol I actually have family near there :/ It’s no RBA, but the countryside is pretty.

    Regardless, I think that anon, being the collective internet intelligence would know that anyway. =)

    Who knows? You can call me whatever you want.

  28. Anniyan Says:

    Perfect for an in law
    ——–
    Nope, perfect an outlaw

  29. Anniyan Says:

    > Perfect for an in law
    ——–
    Nope, perfect for an outlaw

  30. DreamT Says:

    Herve, as long as the village boasts at least one baby donkey, anon is truthful, just as (self-)advertised.

  31. anon Says:

    Still no job, DreamING? Times certainly are tough…

  32. anon Says:

    Especially when you’re an out of work software developer in the Silicon Valley…

    Word class professional opportunities! Unlimited venture capital! Maybe you should start up a .com! A couple posts back I saw you giving career advice. Oh, the irony.

    I love how you address me directly.

  33. DreamT Says:

    anon – A response a la RealEstater! Still no job indeed, so you’re stuck with my daily jabs for a while. I have pretty high standards for commute distance and am only looking at senior or executive management positions. Typical ETA is about six months.

  34. DreamT Says:

    anon – Software Developer? Huh? You must be cross-eyed.
    What career advice was I giving by the way?

  35. DreamT Says:

    anon – software developer jobs are a dime a dozen. Between Craigslist, LinkedIn and direct postings on company websites, eight hours a day aren’t enough to keep up with the openings. If only management positions were as accessible… :|

  36. anon Says:

    I’ll go find it – BRB!

  37. DreamT Says:

    anon – Call me lazy but with a 10 month-old son there is no way I am going to engage in a startup as a founder. There’s always time for that later in life, and no personal achievement can replace a happy family.

  38. bob Says:

    DreamT,
    I’d recommend Jobfox or craigslist.org. I have found all my jobs on craigslist so far. On the other hand, it sounds like you’re pretty picky about commutes and so forth. Just my personal advice from someone on the inside though is I’d possibly suggest finding something sooner than later, even if it isn’t absolutely perfect because in economic environments like this, its best to find a job and stay put to ride out the storm. Better to find something when you know there’s jobs out there versus later when there might actually be less.

    Just my humble advice.

  39. DreamT Says:

    bob – Yes, sound advice, I realize that the economy is slowly crumbling, plus we’re in the budget season so companies aren’t focused on hiring management. But while I’m seriously looking, there are lots of upsides to being unemployed and I’m enjoying them as well while it lasts :)
    Didn’t know jobfox, will check it out.

  40. madhaus Says:

    DreamT, fwiw, my husband took 2 1/2 years off to be with our kids when they were tiny, so I completely understand and respect your priorties.

    But then again my dh could afford to do so. He cashed out all his options in summer 2000. That fall, everyone thought he was a flippin’ genius when all the paper millionaires found their options so far underwater they had to use a bathesphere to look at them.

    I suppose if he hadn’t, that could have gone in the Move Up To Palo Alto fund. But some things really are Priceless.

  41. DensityDuck Says:

    Oh lord, please don’t start saying “dh”, this is not a mommy site! Next you’ll be asking us which is cuter, “crystallynne” or “kristalin”…

  42. bob Says:

    -Or worse: using the word “hubby” ugh…

  43. nomadic Says:

    DensityDuck, those names are hilarious! Remind me of “crystal meth.” Or “kristalin” is kind of like ritalin.

    Hmm, must be a rough morning with drugs on my brain.

  44. WillowGlenner Says:

    pussycat,

    WillowGlenner – Your recent posts mention how the rental market these past few months make your investment properties cash-flow positive. I must ask though: are you expecting to sell them as soon as you’re no longer cash-flow positive? It is my opinion that the current rental prices aren’t sustainable, only a reflection of future homeowners holding off purchasing a house. If the rental market comes back down say to 1999 levels in a couple of years, that’s too short of a time to re-sell your investment properties yet you would no longer be cash-flow positive, so you’d be in a bind stuck with overpriced property. What’s your contingency plan on that or do you think it’s highly unlikely to happen to you?

    I don’t really have a contingency plan because I have actually never been in a situation where rents on some of my properties dramatically declined. It has happened before in the bay area sure- 2001 for example but I did not have many rentals then, and the ones I had were renting for under market.

    But just to put things in perspective for you- if you buy a house for 425K, which is about where I like to buy, you might have a mortgage for 350-380K, and those mortgage+escrow payments are maybe $2600/mo depending on the loan. You can rent 3br/2ba houses in your SLEEP right now for $2500, thats not high rental pricing. Yes it is true that very recently rents have skyrocketed out of control and places in Cupertino are renting for $3400/mo, heck even some APARTMENTS are going for $2900, and that is too high- those will likely come down. But I don’t rent at those levels, because I keep my purchase prices low. Its all about low purchase price doing what I do.

    Heres an example of a house I would consider buying to rent. It is slightly too high priced, and I actually think there has been an uptick in interest in these REOs since May, so this might actually go for over $460 which would mean its slightly too high for me- unless the inside is pristine. But I can guarantee you that this house cleaned up is an EASY $2500 rental and it would take an act of god to cause any tenants to consider it so overpriced at $2500 that they feel compelled to move.
    http://www.redfin.com/CA/San-Jose/1676-MERRILL-Loop-95124/home/1519842

  45. rick Says:

    WG, that sure beats this poor landlord:

    http://sfbay.craigslist.org/sby/apa/811787233.html

    I think the tenants have been burnt in this house.

  46. bob Says:

    So my curious question is how does someone breaking even, or perhaps even losing a bit of money on an investment property with a 100k down payment expect to make money on such an investment property, and what is a realistic timeline to expect any sort of reasonable profits? It sounds to me like putting a 100k down payment on a home that doesn’t really cash flow to start with puts you in a situation where the home isn’t producing profits until the home is actually sold.

    Do you realistically think that you can clear a profit in the next 5 years? Perhaps 10 years, but 5 years I think would be extremely optimistic. That and I’m not counting the cost of renovation. I’m only asking because my parents are also landlords and your math sounds somewhat peculiar.

  47. WillowGlenner Says:

    Well first of all bob, I am not putting down $100K on these properties- you are putting words in my mouth. I like to buy around $425K, and put down 10%, so my typical down is 50K. 10% down on these has always been possible in the past, no problem. That leaves a mortgage of maybe 375K or thereabouts with a low conforming fixed rate which is roughly equal a low priced rent. As to how to make money on an equation like that- its quite simple bob,
    – rents go up over time
    – housing prices go up over time

    ET VOILA! money is made. Its magic, really.

    This ignores the fact that at this moment, you can buy a house and remodel it cosmetically – this is new appliances, floors etc but NOT roof, plumbing etc that cost a lot but add nothing to rental desirability- and rent the place for $3K+, and actually make money. Getting premium pricing for rentals is not my game, I prefer steady tenants who feel that they have a deal.

    Honestly bob, you seem like the most naive and uneducated poster here in financial matters. Yes I believe I will make a killing on these properties. I fully expect the $400s houses that I am buying now to double in price in the next 7-10 years, PLUS I believe rents will approach $3K or so at the low end, in no time, due to the resurgence of inflation.

  48. WillowGlenner Says:

    rick, the fact that that Rancho Rinconada 900sf dump is renting for $2100 just shows you the state of the rental market today, its incredible just as DreamT says. But $2100 for this place is not reasonable and will fall back after the rental market slows a little. The person that owns this might have the slumlord personality profile- try to extract as much money as you can without any property repairs. I think it would be better to put a little money into the place and make it more habitable, and charge a little more rent. Over time you tend to make more money with long term tenants (who take care of your property because they feel that they have a good deal), and a nice improving neighborhood. Until a bunch of landlords like this leave Rancho Rinconada, it will never improve. I would rather buy in that Campbell neighborhood I posted vs Rancho Rinconada even though RR is Cupertino schools, due to the makeup of the owners there.

  49. DreamT Says:

    madhaus – have technically been out of work since March, so you bet I am enjoying every minute of our small family. Timing could not have been better. Still has bob says, best not wait until 2009 when savings will get tight.

  50. DreamT Says:

    WillowGlenner – “But I don’t rent at those levels, because I keep my purchase prices low” Understood, you do not base your math off today’s highest rental prices, that answers my question. Guess it’s obvious when experience is speaking. :)

  51. DreamT Says:

    Has anybody heard from anon since #36? Local anonymous poster’s taunting somewhat fizzled out… Desinit in piscem.

  52. madhaus Says:

    Oh lord, please don’t start saying “dh”, this is not a mommy site! Next you’ll be asking us which is cuter, “crystallynne” or “kristalin”…

    Density, I like to save typing time, and dh is a lot shorter and less repetitive than typing “husband” over and over and over, especially since I don’t use his real name on this board.

    So what really is your problem? Are you somewhat deficient in the kissy-face department these days? Maybe you just need to get out there and GET SOME NOOKIE.

    ps – if you really detest those awful horrible baby names, check out this site. I remember being on one of those Expectant Mom sites trying to convince some 17 YO idiot not to name her baby BrookeLynn. I told her that everyone will think both she and her mother are illiterates and she’ll lose a lot of job opportunities as soon as they read the top line of her resume.

    She named the kid BrookeLynn anyway. I hope the baby grows up to change her name to something like Agnes.

  53. rick Says:

    WG, I can’t distinguish the difference between the two other than the footage, there is only one photo for your house. Yes the neighborhood schools are below 900 for the Cupertino house, but I doubt that there is much better school in 95124 even with this set of schools. Your distinction between one dump and the other seems so stark, and yes I can imagine one would move from the 95124 house without act of god, for one thing a happy tenant would have at least kept the grass from growing like mad.

  54. WillowGlenner Says:

    rick, I am not trying to claim that Campbell house I posted in #44 is some sort of panacea, but its hard to believe you can’t see the difference between that and the Rancho Rinconada place in your post #45.

    Lets focus on the facade of the house to start with. The Campbell house is likely a TJ martin, solid construction (albeit boring) looks like newer roof, paint not too bad, in a neighborhood that is well kept according to the street view in the redfin listing. Yes the grass is dead and that will be remedied when somebody takes the place. The Cupertino house in Rancho Rinconada has a rickety, disrepaired garage as its facade, looks like constructed out of plywood (many RR garages were). There is no comparison between construction of RR and the TJ Martins in San Jose and Sunnyvale- maybe you don’t have a background in construction so you don’t realize it or don’t care, which is fine but I can assure you – many do. basically the Campbell house is a suitable rental for a family looking for a quality house and the RR place is only appropriate for students or those that don’t care.

    The schools in Cupertino are unmatched and the Campbell house has less great Union schools, which are not bad either. But I will put forth that people that care so much about schools want a better house than that RR place offers. It would be extremely easy to rent that Campbell house for $2500., maybe not to you, but to dozens of other people out there. $2500 is actually less than many 3BR APARTMENTS are renting for in the current rental climate. If you want to see where 3br/2ba places are renting in the Merrill st area, go to CL and look for 3+ BR, in South Bay Willow Glen/Cambrian. The Merrill house is technically Cambrian. Here are a few Cambrian houses for comps from that same general area.

    $3200
    http://sfbay.craigslist.org/sby/apa/808678534.html

    $2850
    http://sfbay.craigslist.org/sby/apa/810809849.html

  55. madhaus Says:

    WG, I know multiple families who live in RR in those rickety 3/1 homes, I do not know if the own or rent. They are not students, they are families with kids who want Cupertino schools and will pay for them even if it means living in a dump.

    My kid goes to one of the alternative programs which is why I know people from every part of CUSD and why I’m familiar with almost all the schools.

  56. WillowGlenner Says:

    Well ok madhaus but the discussion was more around whether I can offer a place to rent that is economical to me as a new buyer- my argument was that the Campbell house on Merrill above can be rented for $2500 easily and the renters would likely not move even if the rental market declined, because $2500 is a good rent for a 3br/2ba place. I just went to craigslist and chose south bay/3+ bedroom and doing a quick perusal of the page, approx EIGHT listings on the page were $2500 or lower that were not in Gilroy or Morgan Hill, or obviously apartments. This is south bay wide which includes east san jose (as well as anything in Rancho Rinconada). The point is that a 3br/2ba rancher in a good neighborhood can rent for $2500 so if you can buy a property and make the numbers work, investing in rental properties works. The only reason that RR place came up is that somebody posted it- and my personal opinion is that it is not worth $2100, and it is way dumpier than the Campbell house, and I as a landlord would have an easier time renting the Campbell house (fixed up with yard etc) than the RR place- but hey- thats just me. Either way all this does is reiterate the point that investing in rental bay area real estate works, if you do it right, right now.

    This is rare in bay area real estate by the way which is why I agree with DreamT that it may not last. A good rental investment used to be one where the rent was equal to 66% of the mortgage (assuming the owner has other income he can write off). It is rare when you can buy a house and turn around that moment and go cash flow positive. But it is possible now, with certain properties.

  57. madhaus Says:

    I wonder how the rent ratios between Campbell and RR differ. The premium for the CUSD schools is probably even higher if you purchase, but we have been seeing some crappy RR properties in the $700K range.

    Compare apartment rents between Campbell and Cupertino, they aren’t the same. Now getting the Campbell property to flow positive, that’s a no-brainer. Buy it.

  58. rick Says:

    WG, yes I do appreciate some expert knowledge. That is a good perspective. However, Madhaus is also correct, the Cupertino house will probably fetch a good premium over the 95124 house, simply for the schools. If you think that does not make sense, I agree with you, and that is a good reason why Cupertino is so f**ked right now.

  59. bob Says:

    WG,
    Your model still means that even if you were to get $2,500 for a dumpy starter home per month in rent, you are at best breaking even since the payments on $375,000 if in a typical mortgage would be approximately $2,200 per month, not including taxes, repairs, insurance, or much of anything else. That also doesn’t include the $50,000 down payment. I think your assumption of $3,000 per month is wishful thinking. Me and certainly nobody else that I know would pay that much. We can rent nicer homes for less than that, and even less than $2,500 for that matter. I only pay $1,800 now for a rather large home. Rent it for $3,000 first, then let’ re-check the math.

    Your entire assumption is based almost entirely on appreciation. I won’t argue that eventually, prices on even the crappiest foreclosure homes will eventually go up in value. But how long will that be is the question, and if you think its going to be within 6-7 years, then I think that you’re being a bit overly optimistic since the last 2 busts took at least that long to play out. So realistically, you’re looking at what will likely be a 10 year cycle and even so, what will the actual appreciation be? This is called speculation and there are no concrete guarantees.

    Basically, My opinion ( remember this is my opinion) is that you’re merely speculating and hoping for a repeat of the 2003-2007 bubble with the full expectations of the return of crazy appreciation and insane asking prices even in crappy neighborhoods. For your sake I hope that you’re right.

    But who knows? perhaps I’m wrong, Google will decide to build their new headquarters right over the top of your starter home, or perhaps Apple will invent a cure for cancer and everyone will gladly pay you $7,000 per month in rent.

    All I’m saying here is that my parents have owned two rentals and have never used math that’s as totally reliant on speculation as yours is, and additionally made at least 50% over what the mortgage payments were per month. If I were to suggest a model such as yours, they’d think that was insane. Sorry, but I don’t agree with your financials.

  60. WillowGlenner Says:

    Bob, oh my where to start with this.

    since the payments on $375,000 if in a typical mortgage would be approximately $2,200 per month, not including taxes, repairs, insurance, or much of anything else.

    Yes, mortgage payments are about $2200 not including taxes insurance or repairs. What ELSE do you think would need to be added here? Your statement “much of anything else” implies there is a ton of other stuff not included in this statement. What ARE all those other things I am “missing”?

    I think your assumption of $3,000 per month is wishful thinking. Me and certainly nobody else that I know would pay that much. We can rent nicer homes for less than that, and even less than $2,500 for that matter. I only pay $1,800 now for a rather large home. Rent it for $3,000 first, then let’ re-check the math.

    Of course you wouldn’t bob, because you live in ALAMEDA, in a house that you rented a few years ago. ALAMEDA has probably even gone up since you rented, but who cares, its farking ALAMEDA. The houses I buy are in San Jose either Willow Glen or Campbell, or certain areas of Sunnyvale or Santa Clara. Those locations are on fire regarding rentals. I suggest you look on Craigslist (Cambrian Willow Glen is a good one) and look at rentals- about half of them are over $3K if you manage to weed out the apts and townhomes for 3+ bedrooms. At any rate I don’t rent for that, I just rented my place for $2550 – it was $2500 but they wanted additional gardening services in the back yard, I only pay for cut grass in the back not plants. I had dozens of applicants for this.

    Your entire assumption is based almost entirely on appreciation.

    Yes thats true bob, because every investment is based on speculation.

    I have said repeatedly I expect a return to a hyperinflationary climate and land is a good way to weather that. I don’t need apple or google to buy a new HQ to make money on these houses. But San Jose is planning a new north san jose (near Berryessa) development which would probably yield the next big SV company if I had to guess. New developments are where growing companies like to move to, since land is available.

  61. rick Says:

    WG, do you check out the city planning stuff from city hall? Or is it available on the web?

  62. WillowGlenner Says:

    rick and madhaus, regarding Rancho Rinconada:
    See here’s the thing. Some old timers will probably agree with me on this- at one point, mid-80s most likely , there were many dumpy flat roof nieghborhoods in the bay area that looked something like RR. Midtown palo alto used to look pretty darn rickety, for one. And some of those sunnyvale streets with the “patio homes” looked bad, and some streets in San Jose in the 95125 zipcode willow glen that are not in real willow glen – basically anywhere there was a flat roof development was in disrepair in the 80s. These houses for the most part were built for $5K and intended to last 30 years- 60 years ago. So theres your problem. But anyway, as time has passed and silicon valley emerged, the flat roof neighborhoods were cleaned up- EVERYWHERE BUT RANCHO RINCONADA. Why? You got me. RR should have been like Midtown PA, because you have a top school district there. But no. There are some areas of manufactured homes spattered here and there that are worse than RR even today (between foxworthy and hillsdale in cambrian, or near the bay in san mateo- shoreline area). But those were manufactured homes, so in those cases for the neighborhood to gentrify you have to tear down the shacks and rebuild, which is difficult. Of the actual flat roof neighborhoods, I believe RR continues to be the worst, it just CAN’T GENTRIFY.

    Anyway on the specific house rentals cambrian vs RR, I agree that 100% that a cupertino house will rent for more than a cambrian house. I don’t think THAT cupertino RR house will rent for more than the houses I typically buy because it was only 900sf with one bathroom, essentially no kitchen and it was basically a dump. But who knows, I don’t rent in cupertino so wdik about it? My guess would be a *quality* home in cupertino would go for about $800 more than Campbell.

  63. WillowGlenner Says:

    I get the city planning stuff from various real estate agents and most of it is irrelevant to anything I buy- but this north san jose development is huge and all over the mercury news so you don’t need any special access to read all about it. Here it is
    http://www.mercurynews.com/ci_10084779

    Right now the brouhaha is over who pays for schools in the area and the school people are dwelling on the dense housing being created in the area because it is easy to claim they need more schools, but the apts being built are a tiny part of the development that was required to make the office bldgs work.

  64. madhaus Says:

    WG, don’t know if you include Eichlers in your discussion of flat-roof neighborhoods, but some of them are flat and ugly. Some of them are soaring and ugly instead and have walls that look more like cubicle partitions (I am thinking about the Write Your Own Story About This House entry for the Cupertino Eichler). Anyway both mid-town PA and south PA were full of those POS’s when we were househunting, even in the early 1990s. Many in Palo Alto have been torn down and rebuilt into 2-story places but since I am not in construction, I can’t speak to the quality.

    There have been some neighborhoods in Cupertino that are just as awful as RR, in particular I am thinking of the Blackberry Farm area, drive through there and some of them actually look like sharecropper shanties, but more than half have been torn down and replaced with bigger homes. The reason it happened there? Bloody old Monta Vista high school, the place everyone wants.

    As I said earlier, RR has the worst scoring schools in Cupertino, so people with money to rebuild don’t choose to buy there. There are a couple of excellent elementary schools in Campbell or Moreland school districts, I am thinking of Marshall Lane and Country Lane respectively, but the middle and high schools are not in the same league as any Cup/Fremont Union school.

    For those who want schools, this will drive any home purchase or rental decision.

    I wouldn’t give an absolute price differential between equivalent quality Campbell vs Cupertino schools, I’d give a percent difference. The nicer the place, the bigger the spread, I’d say. So instead of $800, maybe 30-40% markup for Cupertino? I’d expect a bigger markup for purchase. Homes north of Fremont Avenue routinely sell for 10-20% less than those south of it, because south is CUSD and north is Sunnyvale SD.

  65. WillowGlenner Says:

    madhaus I totally see your point about who is likely to buy into an area and do a total rebuild. Those people will buy in Midtown PA, because its PA, but they don’t want RR. RR’s problem really is the numbers don’t add up. Its too expensive to buy and tear down there- if it were, it might be a nice area now.

    But back to the type of owners that are currently there, lets go back to our friend on Johnson street:
    http://sfbay.craigslist.org/sby/apa/811787233.html

    This property is probably worth 800K. Lets assume for a moment the owners have owned for a while and have sizeable equity. It would take $20K to clean this place up, why can’t they AT LEAST do that?

    – driveway cracked and needs repair
    – outside paint required
    – kitchen hasn’t been updated since the 80s
    – whats that a WALL HEATER? Are you fing kidding me?

    It looks like these people haven’t put ONE CENT into this place since the 80s or maybe before. Come on! And the problem is, there are too many of these just like this in RR.

  66. Crossroads Says:

    why are wall heaters so popular here? i see them in a lot of the houses in the price range i can comfortably afford (120k income)

  67. cardinal2007 Says:

    It would take $20K to clean this place up, why can’t they AT LEAST do that?

    Well I’m guessing their thinking goes like this:

    If I put $20K into the place now, 20 years from now it would require another $35k, and another 20 years from then it would require another $55k or so. Costing roughly $90/month adjusted for inflation every month, that damages cashflow! It will never end. Plus it would make being a landlord, equal to working! (once every 20 years).

  68. madhaus Says:

    Hey, I’ve had my driveway replaced, that is not cheap. I think it would cost so much to fix the interior of that house it would actually be more cost effective to bulldoze it, and that’s why the owner is doing absolutely nothing instead. Owner isn’t looking at his/her total equity, only the annoyance factor of making major repairs. I suspect owner plans on renting the place out until it is literally condemned.


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