Starting Out in an Expensive Market
I'm just starting out buying rental properties but live in a very expensive market (San Diego). The average SFH is approximately 650K. How do you purchase cash flow positive rental properties in an expensive market without putting down a huge down payment?
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As an investor, it would behoove you to avoid coming in w/ 20-25% in San Diego if you can. Owner occupancy w/ little money down should yield a great return on your investment.
With that being said, if you don't plan on occupying and if you have to come in w/20-25% down, know that cash flow is good in San Diego. Just not INITIAL cash flow.
We're sitting at 12% median sales price increase right now (year over year). Over the last decade we've consistently been around 5% - 5.5% increase annually.
And, increases in rents will (and have) parallel an appreciating market.
Lastly, San Diego's diverse economy is set to boom over the next decade. Along w/ the military (essentially recession proof) and our tourism, Biotech & our downtown is set to explode via numerous development projects. Should be a great (and safe) 5-10 year play.
Hope this helps.