New investor from San Diego

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New investor from San Diego

Anand S.
Investor · San Diego, CA · Member since 2014 · 36 posts · 8 votes

Hello everyone,

I am Anand and live in San Diego. I have a background in engineering and MBA. My day job is to manage the engineering operations at a large technology company. I am really passionate about real estate and have spent a decent part of past 7-8 years reading here and there, than doing anything about it. I made the first jump this year, when I rented out my primary home in a good school district and moved up into a bigger place in the same zipcode. It has a decent cash-flow, but far less compared to the equity locked in that home when seen from mid-west or Florida kind of locations

I am still trying to refine my strategy as I get ready to make my next investment move by end of this year and hope to nail it through interaction with experts in this forum. At this point, I am prepared to invest $30-40k for a downpayment and torn between and still learning about 3 options - rehab/flip in San Diego, turnkey cashflow investment in Chicago/Indiana, Out of state rehab/flip.

This is really an incredible forum looking at the "ready to share knowledge" culture which further emphasizes in my mind that real estate is really not a zero sum game...

I look forward to connecting with folks here...

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Thomas FranklinPro Member
Real Estate Investor · Miami, FL · Member since 2010 · 939 posts · 739 votes
10y

@Anand S. Since you are interested in fix and flips, I propose the following action plan. The first step would find an Investor Friendly Realtor assuming you do not have access, to the MLS. I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.

1. How many investors do you currently work with and how many investors have you worked with, in the past?

2. How many transactions have you closed, with investors?

3. Do you currently own any Investment Properties? If so, what type do you own?

4. Are you a member of any REIAs?

The next step would be to work with the Realtor and determine the hot markets, in your County, with the greatest number of sales over the last 90 to 120 days. Personally, I would prefer 90 days because markets are always changing. This list would contain the zip code and corresponding name of the municipality, and a breakdown of the number of SFRs. This will be your Farming Area. From this data, you can utilize a website bestplaces.net that will give you a breakdown of the percentage of homes that sold, in various price ranges, for a given zip code. You can identify the two highest retail price ranges, in greatest demand, per zip code where you can list the rehabbed property.

You can use the Realtor to help you find deals and also use Wholesalers. If you acquire a property, from a Wholesaler, once the property is rehabbed and ready for the Retail Market, allow the Realtor that provided you the zip codes, to list the property for sale. This creates a WIN-WIN Situation and gives the Realtor incentive, to work harder on your behalf. 

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    10y
    Originally posted by @Anand S.:

    @Dan H.

    Would love to attend the meetups you are referring to. Any advise how I can get plugged in?

     The guys that throw it are active on BP and advertise the open house.  I suspect one of them will see this thread and post when the next event is if it has already been scheduled.  If that does not work one of my follow words is San Diego and it seems to catch virtually all of them as well as this thread.  Most of the time the events are scheduled a couple weeks out but the last one was much shorter notice.  

    In other words I think it likely that someone will let you know the next event.  Maybe I will make it and we Powegians can meet.  I'm in North West Poway almost in RB. 

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y
    Originally posted by @Anand S.:

    Hi @Matt R.

    It is true that max value is captured and realized in a flip, as opposed to other strategies. Maybe I need to educate myself better to gain more confidence, but it seems to be the least forgiving on a misstep especially in an expensive and competitive market like San Diego...

    Right on.  Dealing with your local opportunities is likely the least riskiest of the 3 options actually. There are a host of reasons for this. This will become intuitive as you learn more. Good luck!

    0Reply
  • Nastasja Terry
    Real Estate Investor · San Diego, CA · Member since 2016 · 8 posts · 11 votes
    10y
    Anand S. , I am in a similar mindset as you. I'd like to invest in San Diego, but it will take a lot more capital than say back in the Chicagoland area (where I'm from). From a flipping standpoint, it is recommended to be relatively close to your properties, as you may want to check progress occasionally and don't want to spend most of your time traveling to your projects. From a buy & hold perspective, you may just have a property manager look after your unit. Interested to see what you end up deciding!
    1Reply
  • Anand S.
    OP
    Investor · San Diego, CA · Member since 2014 · 36 posts · 8 votes
    10y

    Hi @Nastasja Terry

    That is the convention that I am now starting to question and find answers hopefully in the near future (rehab and flip/rent "out of state" properties). How much more risk/reward compared to San Diego? Who will be the key part of the team on the ground there? Can the risk be managed with the right agent who has the experience and the integrity to help hire the right contractor, PM with no other incentive? Or, is it a reputable GC who is looking for a steady supply of projects and looking to partner with an out of town investor? Yeah, still some ways to go before...

    1Reply
  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    10y

    Hey @Anand S.

    Welcome to BP!

    All three of the paths you're considering currently are viable options, but I think there are definitely a few alternative strategies you may want to consider.

    Feel free to shoot me a PM if you'd like to discuss what I had in mind!

    1Reply
  • Anand S.
    OP
    Investor · San Diego, CA · Member since 2014 · 36 posts · 8 votes
    10y

    Hi Kevin

    Sure, would love to know your thoughts on alternative strategies, just sent you a PM.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    10y

    My family and I have never flipped a property but we had a duplex in Gulf Shores Alabama.  It was hit by a couple of hurricanes and needed a lot of work (most units were condemned but our unit was not).  Managing the repairs from a far did not work for us.  We were always the lowest priority and had to take trips both times to ensure that our units were being worked. 

    We loved those units in terms of they were unique that you walk down the front steps to be on the beach sand (the entire unit was on the beach) but financially they did not make sense to keep.  The property tax went up faster than the rents until the hurricanes.  Then there were periods of no rent and by the second hurricane they had lost a lot of their value (but of course no rebate given on the higher taxes we had paid).

    The family still has a unit in Alabama (not beach front, it is on a lake) but we will be leery of purchasing out of state again.

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