Amazing income opportunity in East Palo Alto
Beds: 3 Baths: 1 Sq. Ft.: 940 $/Sq. Ft.: $266 Lot Size: 5,000 Sq. Ft. Property Type: Detached Single Family Style: Ranch Stories: 1 View: Neighborhood Year Built: 1927 Community: East of U.S. 101 County: San Mateo MLS#: 81057944 Source: MLSListings Status: Active On Redfin: 23 days PRICE TO SELL FAST!!! Start building equity right now with this great home in up and coming area of East Palo Alto. This home is well maintained and would be a wonderful starter home or a fantastic income property. New roof!! This property was rented out for $2,000/month. Recently got new carpet, paint and appliances. Priced to sell!!!
Thanks to Burbed reader A.L. for this find!
First, let’s look a the history of this fine, affordable, property.
Wow, just look at the equity possibilities here. Here is $315k of instant equity just sitting around waiting for you to tap.
But what A.L. really wanted to point out was the fact that this place currently rents out for $2000 a month! Can you believe that? $2000 a month in East Palo Alto. Talk about an amazing revenue stream. I wonder who is paying that rate – what are your thoughts?
January 28th, 2011 at 7:14 am
Wrong image: That’s 1100 Cedar St, not 2162 Ralmar Ave.
January 28th, 2011 at 7:22 am
As far as that $2,000 per month in rent, the listing says, “This property was rented out for $2,000/month.” Key word: was, as in no longer.
When was it worth $2,000 per month? When property values in that area were double, closer to $500k.
Good luck renting it out today for $2,000 and collecting the rent checks.
January 28th, 2011 at 9:23 am
You forgot to mention: easy access to 101!!
January 28th, 2011 at 9:34 am
This thing selling for north of 500K is ludicrous!
Hopefully the nice areas will crash as thoroughly letting people buy in at reasonable prices. I bought in 2009 (wife!), so further crashing will be bad for me, but it would be good for the overall economy of the bay area (cheaper housing = more money to spend && lower employee costs for companies/etc) which will be good for me in the long run as I kind of like living here.
January 28th, 2011 at 9:50 am
Wow, I got really fooled by the picture. The price is $750k there – that’s a nasty price-to-rent ration of 362. Looks like the real EPA is a bit more affordable, assuming you could get this wishing rent.
That San Carlos place is ridiculously over-priced. $750k for a tiny house? Who really cares about crown-molding…
January 28th, 2011 at 10:15 am
This looks like more of the image bug from when all the photos on the site were fubared. I asked burbed to fix them (I can’t). What also sucks is that my stuff from a couple weeks ago lost their images permanently, including the $41.5 million San Leandro place next to the freeway. That’s not a photo I can reconstruct.
It also means the long list of hideously overpriced trophy properties lost all their images and that’s going to take a ton of work to redo.
Anyway, for today’s house, it’s appeared on Burbed before! The Westbury NY image is just the bug again.
January 28th, 2011 at 10:26 am
Wow… more problems.
January 28th, 2011 at 10:34 am
And now fixed!
January 28th, 2011 at 11:31 am
Seriously, though, I’d be surprised to see that get more than 1250-1500 a month.
January 28th, 2011 at 11:43 am
By my “realistic” math method, it will cost you $2500 a month so it’s yet another case of renting costing less than buying. And that driveway worries me, that place will need to be secured, concertina wire, motion-detectors controlling lights, maybe someone posted on a guard shift 24/7, you’re gonna need some serious security and that driveway just screams AMBUSH! So you get 4 people in there, each one’s paying $600-odd in, they have half a bedroom and 1/4 a bathroom to call theirs, and not only do they need to work a job but also mount a guard shift, we’re talking a shotty and a Glock and a vest, what fun.
This place has a lot further to fall.
January 28th, 2011 at 12:46 pm
“By my “realistic” math method, it will cost you $2500 a month so it’s yet another case of renting costing less than buying.”
Clearly you’re using a monthly rent of 1% of purchase price as a benchmark. Roughly speaking, that’s 12% annual rent. That puts the purchase price to annual rent ratio close to 8.
Basically your claim is that the break-even point for rent versus buy is at a purchase price to annual rent ratio of 8.
When do you think the purchase price to annual rent ratio will be below 10? How will it get there?
January 28th, 2011 at 1:33 pm
Wow, sfbb (#4), two years later and still “blaming” your wife for buying a house?
January 28th, 2011 at 2:01 pm
#12, I have a feeling #4 wouldn’t have a wife to complain about if he hadn’t bought a house.
January 28th, 2011 at 2:05 pm
Here is the Burbed entry from 2006 (!) for this house. Listed for $579K, yowza, and the agent called it a 3/1 (legal 2/1 as the garage was converted permitlessly).
And Burbed wondered why no inside pictures. Hmmm. Plenty this time. Now the realtard is avoiding the grounds.
January 28th, 2011 at 3:06 pm
#13- I won’t ask if it was worth it. Let’s just say, I’d be happy to get rid of a crazy wife sooner rather than later.
January 28th, 2011 at 3:26 pm
What? Crazy? Huh? By that definition, anyone who wants to buy a house is crazy. At these prices you may have a point, but the nesting urge is wired in deep…
January 28th, 2011 at 3:29 pm
No, no, no. That’s not the underlying issue. Rather than kvetch for two years, I’d get rid of the problem sooner. If I was willing to buy, even at a high price, then so be it. But making a major purchase that will cause great internal strife many years later?
I’d get a divorce: Life is just too short.
January 28th, 2011 at 3:39 pm
SEA you have obviously mistaken me for someone who puts a lot of thinking into their calculations. I do not. I just move the decimal point. The actual mortgage payment is probably a lot less, maybe half? But I calculate in tax, maintainence, a busted toilet, a leaky roof, etc and figure a good rule of thumb is to just move the decimal point and ask yourself if you can afford that. I think it tends to result in more caution – a LOT more caution is required. You’ve got to have a hole in your head to buy a house now!
January 28th, 2011 at 3:44 pm
I don’t have to do a lot of calculations. Suzanne researched this so I didn’t have to.
January 28th, 2011 at 3:56 pm
Wonder how many computations Zuckerberg performed. “When the 4-bedroom house he was renting went back on the rental market last month, it became a rather hot topic as to what the billionaire’s next real estate move would be.”
January 28th, 2011 at 8:40 pm
Interesting. I read the thing about Zuckerberg’s house and then Dave Packard’s house was mentioned, then of course I had to read up on the founders of my favorite electronics company, turns out both Hewlett and Packard got into Stanford, not through academics, but by being good at football (Packard) and having a wealthy father who left money to the school (Hewlett). Yes they were good at electronics and at business, but that was almost immaterial. Being good at football, and being born to wealthy fathers, is what gets you in. Do what you’re expected to do, the football etc., and your interest in tech will be tolerated I guess. Kinda the way a kid sent to a certain school by their father may as a sideline get quite good at classical guitar, on their own time. This is a valuable insight into how things work in the US.
I knew a guy who went to Stanford, not quite dumb as a nail, smart enough I guess, but all that’s immaterial, he was a kick-ass football player who, apparently, kinda got a kick out of injuring the opposition, he was an asset to Stanford. The school whose business is – football. All that science-y stuff is just a sideline, a hobby.
January 29th, 2011 at 1:22 pm
Hopefully the nice areas will crash as thoroughly letting people buy in at reasonable prices. I bought in 2009 (wife!), so further crashing will be bad for me, but it would be good for the overall economy of the bay area (cheaper housing = more money to spend && lower employee costs for companies/etc) which will be good for me in the long run as I kind of like living here.
As much as I’d like to think so I don’t believe houses will ever return to “reasonable” prices. Then again my definition of reasonable means a starter home in a halfway decent area for $300,000 or so, which given the average income in the area would probably be reasonable.
I think that the overarching issue is that despite the recession, crash, and non-stop news talking about housing being in the crapper people- particularly in the Bay Area- still believe it really is “special” here. As such they’ll jump through hoops and go to extreme financial means just to get into something. This attitude is what keeps the prices unreasonable because the prices reflect the absolute maximum skin- -of- your- teeth entry level buyers are willing to accept. Thus most of those who would buy only within reasonable financial means have few choices. Oh well.
January 29th, 2011 at 2:01 pm
What’s the matter, bob? Don’t want to use your cash to try to out bid the great unwashed masses and their borrowed dollars that they have no hope to ever repay? That’s probably a good plan. Unfortunately, the Kool Aid is so strong around here that it will either take a long time or a significant event for housing to come back to earth.
In the meantime, let the “owners” make their sacrifices while you keep saving…
January 29th, 2011 at 3:30 pm
Well Anon,
Not really. Not here anyway. To tell you the truth my whole philosophy about housing has sort of been changing a bit over the past year or so. If you look at the primary reasons that most people give you for buying a house it probably comes back to the notion of some sort of stability. More often than not people are seemingly bound by societal and traditional expectations that come the day they get married or have children they simply must buy a house. I think this notion comes from a long-gone era when this was quite possibly more true- aka- the nuclear family of the 50′s when people kept the same job for 30+ years and retired with a pension. Life was all about reliability and stability and having a “home” base was a convenience. That’s not really the case anymore and jobs come and go with regularity and in many cases companies will transfer their employees around the country. The block I live on is a perfect example of today’s neighborhood. We’re renters yet we’re one of the “long-term” residents being as how about 40-50% of the homes on our block have been bought and sold- sometimes more than once. People buy and move out of houses around here so often it begs the question: ” Why even bother buying?” Again- I think its more to do with psychology and nothing more. A warm cozy feeling that isn’t necessarily grounded in financial logic.
I’ve maintained for years that if a home could be considered anything other than shelter that its a liability. The idea is to someday own that asset free and clear and thus free up income for retirement and other expenditures. But to be honest, how many people do you know who actually own their homes free and clear? More often than not the likely situation most people are in is that as soon as they have the means they’ll trade on up to a bigger home. At the end of the day most people get their priorities backwards. The single most important financial investment anyone should make is their retirement accounts. Plain and simple. Yet most would put the house first, retirement a distant 2nd or 3rd if at all.
Anyway… I’m rambling- which on a Saturday is perfectly admissible. I enjoy complaining about the Bay Area. But overall the area has been good to me. I’ve had a variety of good enjoyable jobs. I’m still renting the same house and the landlord has been nice enough as to not raise the rent yet. We’re going to be able to do pretty well when we move out of here. So I should probably be thankful for what I’ve got.