Two recent closings (4 units in Berkeley, CA, 4 units in Hayward, CA) have shown that the market is consistent throughout the East Bay.
1) Were in contract within hours or a couple of days after coming to the market
2) Both received offers substantially over the listing price
3) Both closed with no credits or discounts to the buyers
This reflects the large number of motivated buyers!
Recent Closing Update
The Hayward four unit property closed last week. The seller received $155,000 over asking. The fourth unit, a garage converted to a studio (non-permitted) was not an issue for loan or appraisal.
Outlook for East Bay rents
Rents are slightly higher month over month in San Francisco.
Renters who left the Bay Area at the start of Covid are now being asked to come back to work, at least a couple of days a week.
This will positively effect East Bay rents. Upon a review of listings on Craigslist, the asking rents is very close to the rents before Covid.
With a lot of companies offering “hybrid” flex work schedules, tenants are still looking for a “Work From Home” layout, if possible. This may be a permanent change, but we will see.
If you are having trouble getting a vacancy filled or have questions, please reach out. Remember that it is better to do a “temporary rent reduction” rather than lowering the rent. This is true for existing tenants and new tenants.
Current Sales Market
If you are thinking about selling in the next 6-12 months, then starting the process now would be a good idea. The market is strong, as buyers are still paying prices based on income that is similar to Pre-Covid. Also, current interest rates for loans are so low that buyers are being aggressive.
Then the issue that has come up is: How do I defer the capital gains taxes?
1) Delaware Statutory Trust. Click DST Tax Deferral,
2) Doing a 1031 tax deferred exchange.
With regards to doing a tax deferred exchange, I have spent some time searching in solid markets (Seattle, Austin, and Reno) for both commercial Triple Net (NNN) opportunities and multi-units that are all delivering at least a 5% CAP rate return.
Click: 1031 Exchange Opportunities
I did a presentation on increasing your rental revenue at the East Bay Rental Housing Association in last year. Click Here: Maximizing the Return on your Investment for the highlights.
Please reach out if you are interested in getting more information on the DST option or 1031 exchange.
My most recent transaction, a triplex, went into contract at full price, very short closing and no issues. If priced right and marketed fully, sellers are getting very strong offers.
Current Market For Building Sales
For example, if you want to sell your apartment at this time, I can help you with an evaluation and guidance.
I have spoken to two of the top lenders for East Bay multi-units and they are working on, and closing transactions at this time. I can forward their contact info if you want to speak with them.
Right now, If buyers have a good down payment they can get a loan and I can navigate you through the process.
It is always important to get guidance and advice from experienced multi-unit brokers who will market your property extensively to all potential buyers and brokers. Posting a new building on all websites and sending out emails blasts gives the property visibility to literally tens of thousands of potential qualified buyers.