First Investent Property
I’m from San Diego and want to invest in my first real estate property. Where would you start with $40k? It would be ideal to house hack in San Diego but I don’t think $40k is enough to begin.
My long term goal is to invest in rental properties full time but scared to make the first step. My short term goal by three years is to have my own property (using profits from my first investment to down).
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#4 Market Trends & Data Contributor
- Investor
- Poway, CA
$40k can purchase a lot of home via FHA loan at 96.5% LTV. I suspect your $40k is not the limiting factor, but what loan amount you can qualify for will be the limiting factor
There are many local realtors on this site. The good ones will help get you pre-approved so you know exactly what your price constraints are. This will allow you and the realtor to focus on properties that meet your needs and financial constraints.
$40k can go a long ways when owner occupied (or non owner occupied with creative financing). It can easily purchase a starter home in San Diego using FHA loan.
good luck
@Ashley Nguyen that is more than enough to start investing in San Diego. You can buy a $1M duplex in San Diego putting down about $35,000. I highly recommend buying a duplex, but not necessarily at $1M for you since you need to have some left over for closing and reserves. You should definitely try to get lost or all your closing costs covered so you can keep more of your money for reserves.
Best way to start in San Diego with that amount of money is an owner occupied duplex or house with an ADU using fha to house hack. You can use rental income to qualify for higher loan on duplex but can't do so with an adu. But either way,Live in one, rent other. Next option down the list is an SFR or condo and rent out the other rooms.
@Dan Heuschele Thank you. My limit for a property at the moment is $428k. That still can't get me much in San Diego, unless it's a condo or I look to invest outside of San Diego. Do you know if I can get a two bedroom condo and rent out the second room with an FHA?
@Twana Rasoul Thank you. My limit for a property at the moment is $428k. I would love to get something where I can attach an ADU but for that amount I don't see it happening. I am considering to purchase outside of San Diego or I'll have to save more. Do you know if I can get a two bedroom condo and rent out the second room with an FHA loan?
Originally posted by @Ashley Nguyen:@Twana Rasoul Thank you. My limit for a property at the moment is $428k. I would love to get something where I can attach an ADU but for that amount I don't see it happening. I am considering to purchase outside of San Diego or I'll have to save more. Do you know if I can get a two bedroom condo and rent out the second room with an FHA loan?
You can def get a 2 bedroom condo and rent out the other one, but you will be getting killed by the HOA... what is your current living situation? with 40k you can get a turnkey rental cash flowing at about 150-200 a month. I just recently closed one two turnkey properties, let me know if you have any questions.
@Ashley Nguyen yes you can get an fha loan and rent out the other rooms. I just closed on a 3 bedroom condo less than 2 weeks ago for someone house hacking, living in one room and renting out the other two. Buyer used 5% down conventional loan and purchase price was $410k. That same buyer was only considering out of state investing just 2 months ago.
House hacking is the best way to start and you get the biggest bang for your buck by being able to get high LTV (loan to value) financing. You would be purchasing something with just 3.5% down payment in a market that has had a nearly 5% year over year appreciation for the past half century (includes all the downturns as well). You theoretically make your down payment back through appreciation in less than 9 months. But you build wealth here in San Diego by holding on to property long term.
Congrats on getting started! As already mentioned buying a condo and renting out one of the rooms is a great way to into into real estate investing. You have more down payment than needed for your price point which is great. What other questions do you have?
@Joseph Vu I'm interested in a 2bd/1b townhome listed for $359k. Do you have any tips with what I should find out/ask HOA if I want to rent out a bedroom. Can you tell me more about your turnkey rentals? Purchase price, neighborhood, anything helps! Thanks.
@Twana Rasoul Man you really know your stuff !! Got the same issue as this guy .. got 60k l just don’t know where to get started from Ny
Have you considered investing out of state? Otherwise househacking might be your only option with that down payment in San Diego.
Originally posted by @Ashley Nguyen:@Joseph Vu I'm interested in a 2bd/1b townhome listed for $359k. Do you have any tips with what I should find out/ask HOA if I want to rent out a bedroom. Can you tell me more about your turnkey rentals? Purchase price, neighborhood, anything helps! Thanks.
I understand the living situation in California, it is super expensive, so if you are currently pay rent right now anyways, I would definitely consider buying some property and house hacking it. With the extra savings from house hacking you can put that towards out of state property due to its lower entry costs.
If you can afford property without an HOA I would definitely try to do that, but if its unavoidable and you can only afford a town home or condo, as long as you are paying less in comparison to what you are currently paying for rent, its a win-win in my book.
Also, I dont think most HOAs have anything against renting out a room, but you can look up who the HOA where the property is for sale and give them a call and just ask them over the phone if they allow renters and what their policy is.
I currently have a turnkey property in OKC through REI nation. I put 40k down including closing for about 250 in cash flow a month. I am trying to close on my 2nd in Indianapolis at the moment. Let me know if you have any other questions! Feel free to PM me as well.
@ashley nguyen
Originally posted by @Joseph Vu:Originally posted by @Ashley Nguyen:@Joseph Vu I'm interested in a 2bd/1b townhome listed for $359k. Do you have any tips with what I should find out/ask HOA if I want to rent out a bedroom. Can you tell me more about your turnkey rentals? Purchase price, neighborhood, anything helps! Thanks.
I understand the living situation in California, it is super expensive, so if you are currently pay rent right now anyways, I would definitely consider buying some property and house hacking it. With the extra savings from house hacking you can put that towards out of state property due to its lower entry costs.
If you can afford property without an HOA I would definitely try to do that, but if its unavoidable and you can only afford a town home or condo, as long as you are paying less in comparison to what you are currently paying for rent, its a win-win in my book.
Also, I dont think most HOAs have anything against renting out a room, but you can look up who the HOA where the property is for sale and give them a call and just ask them over the phone if they allow renters and what their policy is.
I currently have a turnkey property in OKC through REI nation. I put 40k down including closing for about 250 in cash flow a month. I am trying to close on my 2nd in Indianapolis at the moment. Let me know if you have any other questions! Feel free to PM me as well.@ashley nguyen
Pretty good cash flow for a turnkey in OKC!
Originally posted by @Forrest Faulconer:Originally posted by @Joseph Vu:Originally posted by @Ashley Nguyen:@Joseph Vu I'm interested in a 2bd/1b townhome listed for $359k. Do you have any tips with what I should find out/ask HOA if I want to rent out a bedroom. Can you tell me more about your turnkey rentals? Purchase price, neighborhood, anything helps! Thanks.
I understand the living situation in California, it is super expensive, so if you are currently pay rent right now anyways, I would definitely consider buying some property and house hacking it. With the extra savings from house hacking you can put that towards out of state property due to its lower entry costs.
If you can afford property without an HOA I would definitely try to do that, but if its unavoidable and you can only afford a town home or condo, as long as you are paying less in comparison to what you are currently paying for rent, its a win-win in my book.
Also, I dont think most HOAs have anything against renting out a room, but you can look up who the HOA where the property is for sale and give them a call and just ask them over the phone if they allow renters and what their policy is.
I currently have a turnkey property in OKC through REI nation. I put 40k down including closing for about 250 in cash flow a month. I am trying to close on my 2nd in Indianapolis at the moment. Let me know if you have any other questions! Feel free to PM me as well.@ashley nguyen
Pretty good cash flow for a turnkey in OKC!
thats because I didnt factor in my vacancies and repairs yet. With those factored in im sitting at about 150 a month. The property was just rehabbed with a new roof, hvac, and water heater.
Originally posted by @Joseph Vu:Originally posted by @Forrest Faulconer:Originally posted by @Joseph Vu:Originally posted by @Ashley Nguyen:@Joseph Vu I'm interested in a 2bd/1b townhome listed for $359k. Do you have any tips with what I should find out/ask HOA if I want to rent out a bedroom. Can you tell me more about your turnkey rentals? Purchase price, neighborhood, anything helps! Thanks.
I understand the living situation in California, it is super expensive, so if you are currently pay rent right now anyways, I would definitely consider buying some property and house hacking it. With the extra savings from house hacking you can put that towards out of state property due to its lower entry costs.
If you can afford property without an HOA I would definitely try to do that, but if its unavoidable and you can only afford a town home or condo, as long as you are paying less in comparison to what you are currently paying for rent, its a win-win in my book.
Also, I dont think most HOAs have anything against renting out a room, but you can look up who the HOA where the property is for sale and give them a call and just ask them over the phone if they allow renters and what their policy is.
I currently have a turnkey property in OKC through REI nation. I put 40k down including closing for about 250 in cash flow a month. I am trying to close on my 2nd in Indianapolis at the moment. Let me know if you have any other questions! Feel free to PM me as well.@ashley nguyen
Pretty good cash flow for a turnkey in OKC!
thats because I didnt factor in my vacancies and repairs yet. With those factored in im sitting at about 150 a month. The property was just rehabbed with a new roof, hvac, and water heater.
Nice to have those upgrades taken care of!