New Teacher From California

15 Replies

Hello all at BP, 

My name is Kyle and I just received my M.A. in Education, teaching PE in the Bay Area in California. I am highly debating taking a job offer to teach in the San Diego area. After lurking on BP for a month or so listening to podcasts and reading forums, I have finally decided to join! I will admit now that my profession combined with my expensive market can force me out of buying properties anytime soon, but my motivation and interest in this field has overcome that fear. I'm ready to put myself out there.

A little about me: I'm a 25 year old teacher, eager to get into the real estate investing arena. I also have a B.A. in Economics, but chose teaching due to the enjoyment I get out of it. I enjoy sports, playing guitar, and the beach.

I have completed the 135 hour real estate salesperson course through Rockwell Institute, and really felt like I learned a lot. The course combined with my BP lurking has got me feeling quite confident with the real estate lingo, different types of loans, and the basic concepts. 

My main investment interest is in rentals. I've really gravitated towards multifamily properties because I like the idea of living next to my tenants (hopefully rent free). My goal is to own quite a few flourishing properties in order to have financial freedom and eventually move towards part-time teaching and more full-time investing and looking after my properties!

@Kyle Marek If you do end up in SD I would highly suggest you think about vacation rentals. If you could live in one unit (use an FHA loan to only have to put 3% down) you could manage the other units as short term rentals (STR). Just a thought.

Thanks for the advice, Ryan. Do you think the ROI on a vacation rental could be higher than leasing? I assume you mean the units could be rented out through Airbnb. Would vacancy be something I would have to worry about more using the units as vacation rentals rather than leasing?

Thanks in advance!

@Ryan Blake

Didn't realize you had to tag names for them to receive notifications of responses. I'd like to keep my conversations going! I'll post the same response:

Thanks for the advice, Ryan. Do you think the ROI on a vacation rental could be higher than leasing? I assume you mean the units could be rented out through Airbnb. Would vacancy be something I would have to worry about more using the units as vacation rentals rather than leasing?

Thanks in advance!

@Kyle Marek I think that depending on where you are (close to the rail lines in SD, ocean, downtown) you could do much better renting by the night than by the month. If monthly for a 2 bed is $2,000 and you are able to ask $250+/night you would only need about 30% occupancy (roughly 10 nights/month) to cover costs. This is because you have to furnish and pay utilities that you wouldn't in a standard renting situation. If you rent more than 30% occupancy you would be making more than standard rentals.

I suggest you do a lot of research before going with this but I think it should be one of your strategies to consider.

@Ryan Blake Thank you for using some numbers and an example. You are right, the good location properties can probably be rented at a premium if they are in any desirable spot in SD. 30% occupancy doesn't seem like to tough a feet, but like you said I'll have to do a lot of research first!

Thanks for giving me a strategy to consider!

@Casey Murray

Thanks! I know they are amazing, definitely my main draw to the San Diego area.

I see you've had some experience in multifamily properties in SD. I'm very interested in multifamily properties. I like the idea of living in one unit and renting out to tenants who will be my neighbors.

How has your multifamily experience been in SD? I'm curious how affordable and abundant they are as well

Originally posted by @Ryan Blake :

@Kyle Marek If you do end up in SD I would highly suggest you think about vacation rentals. If you could live in one unit (use an FHA loan to only have to put 3% down) you could manage the other units as short term rentals (STR). Just a thought.

still suggest that given the city council just voted to ban STR in all but your primary home and even that for just 1/2 the year?

@Cody L. I am not aware of local news given I don’t live in SD. Obviously you would want to check with local regulations before entering in to any real estate purchase.

What do you mean 1/2 of the year? I am pretty sure people visit SD more than just 6 months during the year. I can tell by the fact that Seaworld, the SD Zoo and Legoland being open year round. Not to mention the fact that the convention center is a big draw all year, there is a thriving downtown, and the winters are extremely mild compared to a majority of the US. Don’t well SD short. It’s a great place no matter the time of the year.

But again back to your first comment, make sure you are investing in real estate in a way that follows all laws.

@Cody L.

@Ryan Blake

Did the research, and it seems you are right Cody. Most SD cities have been revolting against STRs for years, and the city counsel decided to ban vacation rentals except for in primary homes. Seems like this would sort of kill the future possibility of STRs?

I'm more interested in rentals anyways because of the longer leases, consistency, and less tenant turnover. But thanks for the heads up, Cody.

@Kyle Marek My experience has been really good so far. The value is really in the rehab to raise rents and property value. Expensive housing market means increased rents. Be very familiar with your market rents since under advertised rents could be the difference in a deal. 

@Casey Murray

If there's one thing I've learned on BP, its that you make money based on your purchase price. I plan to get very familiarized with market rents in SD. I'm interested in multifamilies, but not sure how possible it is to find a cash flowing one based on comments here. Sounds like a good bet to find one that needs renovation? Maybe use the 203k lone? Still learning so any info/suggestions mean a lot!

@Kyle Marek You make your money when you buy is the general rule of thumb but it doesn't apply in all situations. Check out BP Podcast 278 where the guest talks about buying MF properties at retail price but still coming out with a deal because he knew the market. His market is Denver which I view as comparable conditions as San Diego. The 203k loan is a great option if you have a property needing rehab work and you need the capital. Hope this helps!

@Casey Murray Love the idea of the 203k loan to buy a property that needs work! But thank you, I'm learning that not all rules apply to all markets. I should learn my market inside and out to see what rules do and don't apply.  Will definitely check out e278, sounds like exactly what I'm looking for. Thanks for your time Casey!

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