San Diego multifamily market

[Judy Ortley]

Hi there,

Is it still profitable to invest in RE in San Diego area?  

[Dan H.]

I agree it is possible to cash flow in San Diego but the cap expense is higher here than most other places.  So a lot of properties that look like they cash flow do not.   

However if you have the time and skills to do a lot of the rehab yourself you can get instant equity gain and the resulting unit is more likely to cash flow.  

I suggest you look at a cap expense itemized sheet and their numbers then realize their costs are way lower than in San Diego.  For smaller units I use $300 per unit per month.  I derived this number by starting with a cap expense sheet and replacing the cost on the sheet with my experienced cost in San Diego.  I also modified a couple of the life spans for what I am actually encountering.  

By the way my area of expertise is Escondido.  I claim to know price point of multi units in Escondido better than any reactor I have yet to encounter.  Arrogant?   I or my wife have looked at the exterior of virtually every reasonably priced multiplex on open market for last 5 years.  We have placed many offers and tracked what each sold for.  I can virtually always predict which one will be sold within a month and which will linger.  

If you choose to invest in Escondido I am willing to tell you what I think of the price point of a property if you desire a sanity check.