Beach condo vs SFH

[Victor Lo]

Hello all,

I'm new to BP and real estate investing. I live in San Diego and am interested in investing locally to be a little more hands on while I am learning. I am aware that Southern California in general is expensive and positive cash flow appears non-existent. My initial thoughts on strategy is to buy and hold and ultimately build equity.

In looking locally, Oceanside seems like a more "reasonably" priced coastal location compared to some other San Diego areas. I am considering a 1 bed/1bath beach condo for STR. However, when I look at prices in Oceanside, that beach condo could also buy a small SFH more inland. Though with recent STR regulation changes, it looks like many SFH locations do not allow STR and can really only be used to LTR. In comparing the two options, what are some opinions from the BP group?

Thanks in advance!

[Joel Bongco]

Quote from @Victor Lo:

Hello all,

I'm new to BP and real estate investing. I live in San Diego and am interested in investing locally to be a little more hands on while I am learning. I am aware that Southern California in general is expensive and positive cash flow appears non-existent. My initial thoughts on strategy is to buy and hold and ultimately build equity.

In looking locally, Oceanside seems like a more "reasonably" priced coastal location compared to some other San Diego areas. I am considering a 1 bed/1bath beach condo for STR. However, when I look at prices in Oceanside, that beach condo could also buy a small SFH more inland. Though with recent STR regulation changes, it looks like many SFH locations do not allow STR and can really only be used to LTR. In comparing the two options, what are some opinions from the BP group?

Thanks in advance!

Aloha Victor, the San Diego RE market is very similar to Hawaii.  Here are some options:  1. Look for distressed properties -  there are about 60+ in Oceanside.  San Diego has over 350+ preforeclosures.  You'll get better price points on a distressed properties without the competition.  2. The State of Hawaii made STR's difficult, however, our workaround are MTR's.  I am sure you can do the same in San Diego and have better rates than LTR's. I would pursue both and see what lands. 

[Nadeem Alamgir]

Hey Victor, while looking for opportunities locally, would you consider going out of state?

Ohio is a great market to focus on for cash flow. It is landlord-friendly and has a low barrier to entry. A ton of STR's opportunities include traveling nurses for hospitals, medical centers, and campus sights for OSU students.

[Bradley Buxton]

@Victor Lo

The SFH homes usually fewer restrictions if there is no HOA. The Condo by the beach will likely have more appreciation as there is less land to build on by the beach. The weather seems to be heating up and people will want to be closer to the ocean. Condo HOAs can have personalities to manage but can keep the property in better condition and can cover some expenses. Check the rules and the accounting carefully once you have it under contract. Sometimes a title company can get you the HOA rules before putting in an offer.