Where is the best place to invest in Buy/Hold SFRs?

6 Replies

Hello again all!

I am the owner of 3 SFRs in San Diego (buy and hold strategy) and I am looking to buy my 4th property ASAP.  Unfortunately, it looks like I just missed with prices over the last few months and everything within my budget (~$250k) here in San Diego is all bought up aside from fixer-uppers, which I don't have the money to put into.

So now I am asking everyone out there (preferably still within driving distance, but whatever) WHERE is the best place to invest right now in SFRs using a buy and hold strategy?

Anyone have any thoughts on this or links to some research?

Thanks again!

There are multi family properties you can buy in Fresno for around that price.  I've definitely seen some duplexes up to six-plexes.  Check on loopnet.  It's not that close to you, but that market has held pretty steady for many years.  Just base your offer price on the numbers and don't get caught up on the asking price. 

be careful wih Fresno. I am a buy and hold investor and live 45 minutes away. Right now you wouldn't catch me dead there buying those types of duplexes. 

@Elizabeth Colegrove   Why be careful in Fresno?

I hear ya Nathaniel. Have you checked Escondido? I recently saw an awesome deal there that fell out of escrow and was quickly snagged maybe keep an eye out. Otherwise it is IE or Palm Springs areas next stop perhaps. Thanks, Matt

Originally posted by @Elizabeth Colegrove:

be careful wih Fresno. I am a buy and hold investor and live 45 minutes away. Right now you wouldn't catch me dead there buying those types of duplexes. 

 What's wrong with Fresno?

I wouldn't call Fresno "driving distance" from San Diego.  That's 7h away, so you might as well invest out-of-state...

Looking at your RE Goals @Nathaniel Donnelly it looks like you have the right mindset to target the areas of San Diego that could benefit from some improvement. We've been doing a lot of targeted analysis of specific neighborhoods in North County and East County, and there are still areas where the numbers work. The key seems to be in being very selective, and finding a deal that requires AND permits some rehab relative to ARV.

I know you said you weren't too interested in a fixer-upper, but if you focus on a neighborhood that you see has a schism between the distressed properties and those that are selling retail there is hope.  I know this is a basic principle of flipping, but for someone whose strategy is buy and hold you can shoot for properties that require some sweat equity but still adhere to the 1% or 2% rule (market rent is acquisition/rehab cost).  If you are really averse to doing the rehab yourself, you could always buy from a flipper that is looking to dispo their recently redeveloped property or even partner with a rehabber to manage the project during the repair stage.

As the great @brandon turner says: 50% of a deal is better than 50% of no deal.

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