Active Duty Military REI | New to REI World

New Member Introductions
2yFollow

Active Duty Military REI | New to REI World

Mark Torrefiel
New to Real Estate · San Diego, CA · Member since 2024 · 16 posts · 14 votes

Hi everyone! I'm new to the REI world, currently living in Elizabeth City, NC while working in Norfolk, VA as an active duty Sailor in the USN. In two months, I will be changing duty stations to San Diego, CA. I've done 14 years active duty and 8 moves both nationwide and overseas.

I currently have one home that I am slated to rent out in the next three weeks and a town home that is currently being built and will be rented out by September. Currently seeking MFH opportunities in the San Diego region for owner occupation with room for growth in the form of rehab and ADU.

My wife and I also own two condominiums in Manila, Philippines that are near completion. Our target for one condo is STR and LTR for the other one. Currently working on expanding our investments in and around the Manila region.

My goal is to grow my portfolio in SFH, MFH, and commercial real estate. I am currently seeking GP opportunities in commercial real estate; open to residential, mobile home, development, self-storage, mixed use, or any unique opportunities. Seeking to grow net worth and cash flow in the next 6 years.

1Reply
32 views

Most Popular Reply

Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
2y

Buying in San Diego county at retail is a long term investment. The returns initially are poor. If using high LTV loan and legit underwriting, the purchase will have negative initial cash flow. In addition, the city of San Diego has very unfriendly to LL tenant laws. Rent control more extreme than the statewide rent control. STR quota. The most strict COVID eviction moratorium in the country.

However, for long holds there are few markets that have historically done better.  It is virtual guarantee that a RE purchase looks great at 10 years.  Our appreciation and rent growth is near top of nation virtually every year.  We have bp near lowest late payment, missed payment, and eviction rate in the country.  this is largely because we have crazy low vacancy rate.  When we screen, we will not accept you if you have ever been evicted.  We require strong LL referrals and state this requires more than paying your rent on time.  We want your unit to appear like it would if you were owning it and not renting it.  Do we have issues finding tenants with such strict requirements?  We usually get our tenant from our first open house (but we write our leases such as none expire Oct thru February). 

In summary you need to be committed for the long term which can get tough when rent barely covers PITI at purchase and you get a large cap expense. It could be easy to get frustrated and want to sell.

Good luck

1Reply
See this reply in the discussion

4 Replies

Jump to latestLatest
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y

    Buying in San Diego county at retail is a long term investment. The returns initially are poor. If using high LTV loan and legit underwriting, the purchase will have negative initial cash flow. In addition, the city of San Diego has very unfriendly to LL tenant laws. Rent control more extreme than the statewide rent control. STR quota. The most strict COVID eviction moratorium in the country.

    However, for long holds there are few markets that have historically done better.  It is virtual guarantee that a RE purchase looks great at 10 years.  Our appreciation and rent growth is near top of nation virtually every year.  We have bp near lowest late payment, missed payment, and eviction rate in the country.  this is largely because we have crazy low vacancy rate.  When we screen, we will not accept you if you have ever been evicted.  We require strong LL referrals and state this requires more than paying your rent on time.  We want your unit to appear like it would if you were owning it and not renting it.  Do we have issues finding tenants with such strict requirements?  We usually get our tenant from our first open house (but we write our leases such as none expire Oct thru February). 

    In summary you need to be committed for the long term which can get tough when rent barely covers PITI at purchase and you get a large cap expense. It could be easy to get frustrated and want to sell.

    Good luck

    1Reply
  • Mark Torrefiel
    OP
    New to Real Estate · San Diego, CA · Member since 2024 · 16 posts · 14 votes
    2y
    Quote from @Dan H.:

    Buying in San Diego county at retail is a long term investment. The returns initially are poor. If using high LTV loan and legit underwriting, the purchase will have negative initial cash flow. In addition, the city of San Diego has very unfriendly to LL tenant laws. Rent control more extreme than the statewide rent control. STR quota. The most strict COVID eviction moratorium in the country.

    However, for long holds there are few markets that have historically done better.  It is virtual guarantee that a RE purchase looks great at 10 years.  Our appreciation and rent growth is near top of nation virtually every year.  We have bp near lowest late payment, missed payment, and eviction rate in the country.  this is largely because we have crazy low vacancy rate.  When we screen, we will not accept you if you have ever been evicted.  We require strong LL referrals and state this requires more than paying your rent on time.  We want your unit to appear like it would if you were owning it and not renting it.  Do we have issues finding tenants with such strict requirements?  We usually get our tenant from our first open house (but we write our leases such as none expire Oct thru February). 

    In summary you need to be committed for the long term which can get tough when rent barely covers PITI at purchase and you get a large cap expense. It could be easy to get frustrated and want to sell.

    Good luck

     Dan,

    Thank you for that advice and insight. Very valuable!

    That is exactly what I intend to do to break into the San Diego market, long term rentals. Just taking peeks in the area, I've adjusted my goals to creating that growth in equity and net worth. If I can score some cash flow, I'll take the win, but my plan is to at least break even in payments. I'm fortunate to have the VA home loan to help, as well as housing allowance from the military.

    The struggle right now is finding the right property that meets all the wickets. If I play my cards right and take action judiciously, I know it can work out.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    2y
    Quote from @Mark Torrefiel:
    Quote from @Dan H.:

    Buying in San Diego county at retail is a long term investment. The returns initially are poor. If using high LTV loan and legit underwriting, the purchase will have negative initial cash flow. In addition, the city of San Diego has very unfriendly to LL tenant laws. Rent control more extreme than the statewide rent control. STR quota. The most strict COVID eviction moratorium in the country.

    However, for long holds there are few markets that have historically done better.  It is virtual guarantee that a RE purchase looks great at 10 years.  Our appreciation and rent growth is near top of nation virtually every year.  We have bp near lowest late payment, missed payment, and eviction rate in the country.  this is largely because we have crazy low vacancy rate.  When we screen, we will not accept you if you have ever been evicted.  We require strong LL referrals and state this requires more than paying your rent on time.  We want your unit to appear like it would if you were owning it and not renting it.  Do we have issues finding tenants with such strict requirements?  We usually get our tenant from our first open house (but we write our leases such as none expire Oct thru February). 

    In summary you need to be committed for the long term which can get tough when rent barely covers PITI at purchase and you get a large cap expense. It could be easy to get frustrated and want to sell.

    Good luck

     Dan,

    Thank you for that advice and insight. Very valuable!

    That is exactly what I intend to do to break into the San Diego market, long term rentals. Just taking peeks in the area, I've adjusted my goals to creating that growth in equity and net worth. If I can score some cash flow, I'll take the win, but my plan is to at least break even in payments. I'm fortunate to have the VA home loan to help, as well as housing allowance from the military.

    The struggle right now is finding the right property that meets all the wickets. If I play my cards right and take action judiciously, I know it can work out.


    Working class areas have better initial cash flow than more upscale areas but also require more work.  In the long hold, I suspect there is little difference in return but you will have exerted more effort on the working class area. 

    Even though I claim in long term returns will be similar and the effort will be less in the high class area, virtually everyone starts in the better cash flow areas (working class areas). 

    There are 2 areas in San Diego that I believe are likely to out perform the general San Diego RE market (and I am not invested in either due to distance from my base).  1) west Chula Vista (CV).  The area has a large bay front redevelopment effort.  In addition, how many areas do you know where by the bay/ocean is cheaper than more inland?  West CV is older than east CV and is virtual certainty to  gentrify. 2) Imperial Beach (IB) is cheapest ocean properties in US for hundreds of miles.  There are 2 main reasons 1) proximity to Mexico 2) water pollution, which is related to #1.  IB will always be close to Mexico, that is not changing.  However the water pollution continues to get more publicity.  It has started to effect the beautiful Beaches of very upscale Coronado.  The problem has never been closer to having large sums of money to address.  Note it will take time even if/when sufficient money is allocated.  But it is likely to occur and as that probability increases it will be reflected in IB’s RE prices.  

    Good luck

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    2y

    Hi there.  Holler if you need assistance with the  properties you will renting in Hampton Roads.

    757-472-2547
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free