Can you house-back in San Diego?

Question

Good morning BP nation,

My wife and I are looking at purchasing a home in San Diego but want to house hack. All the multi-family properties I have seen on Loopnet.com have a cap rate of 1-3%. So the question is, can you house hack in SD? Are there any BP investors that have found a way to make it work? If so, we’d love to talk.

Thanks for help!

J&B

Brian R. · Answer

@Caleb Brown we are realizing the cash flow would not be the primary reason to house hack in this market. However offsetting monthly expenses will be a plus. With the cost of homes in SD, buying and holding will be the biggest ROI.

Brian R. · Answer

@Maxwell Ventura thank you so much for the info. Could we talk more?

Twana Rasoul · Answer

hi @Brian R. House Hacking is certainly possible with multifamily throughout different parts of San Diego.  I house hack myself and have done a dozen+ hack deals with multifamily this year throughout the county and another several SFR/Condo renting by the room...From Oceanside, Vista and Escondido in North County to Mission Hills, Hillcrest, North Park, Linda Vista, PB, etc in more central San Diego.  Most of these have been those that are putting 0% using VA loan or 3.5% down using FHA loan.  So not only is it possible but others are doing so here in San Diego everyday.

Jordan Graham · Answer

Hi Brian,

Yes, you can definitely house-hack here and can even make the numbers work right away. The best strategy depends on your individual situation. I am currently single and have no kids so I like the approach of finding SFH's with 4+ bedrooms (the more rooms the better). This strategy is great because you can rent by the room or just rent to one tenant.

One thing I would recommend is get very good at analyzing properties. It is a numbers game and most properties will be negative cash flow but there are a few golden nuggets out there. I have a great spreadsheet for plugging numbers in and seeing what returns you can expect in the future if you'd like me to send it to you.

Brian R. · Answer

@Charles Renn good questions and we have goals drafted to keep us focused. Thanks for the feedback.

Caleb Brown · Answer

You can. Most likely won't cashflow or be amazing but cheaper than renting and you are saving money on expenses. Another plus is low money down in a hot market. The other plus is owning in a strong appreciation market. The equity can be used for many options beyond that investment.

Charles Renn · Answer

Hi @Brian R.,

Looks like you have a lot of good feedback here. If I can add anything it would be to lay out your goals first. While house hacking is possible ask yourself questions like: How long do I want to live in this home? Do I plan to sell in a couple years or hold and rent? Do I want to add value to the property and build an ADU or remodel units, or step into a turn-key property?

These are just a few questions. Our team also has an agent in San Diego. If you'd like another set of eyes on the market, let me know!

Maxwell Ventura · Answer

@Brian R. People house hack here all the time. Most caps you'll see in SD range between 3 - 4.5% depending on a multitude of factors, location being a big one.

Initial cashflow with low money down will usually result in being negative in the early years. There are always exceptions. Major gains are made via compounding appreciation. Of course, you have your other benefits of RE investing (Tax savings/depreciation & principle pay down).

Hope this helps

Brian R. · Answer

*auto correct - house HACK* 🤦🏼‍♂️