New to BP but not new to San Diego. My Ultimate Goal: Build a portfolio of $10k+ passive income (net) and live by the beach in San Diego within 10-12 years (and "retire"). I have a decent full time job, can qualify for a good loan, no debt, have $200k seed money. Can purchase something now worth $1+M. Now just trying to figure out where to start.
I hear all the time that San Diego is not good for cash flow but what they really mean is that the initial cash flow is not great.
My San Diego, per door, cash flow is great. Average rents in San Diego for SFR have increased almost $500 in the last 3 years and for apartments over $500 in last 5 years. This implies a cash neutral purchase of a SFR from 3 years ago would have nearly $500 positive cash flow today.
I suspect as you hit $10k month cash flow you will find it does not go as far in San Diego as you may suspect. Certainly it will not be enough to live by the beach in San Diego.
Best of luck to you! I also live in San Diego (born and raised) and couldn't make it work here. I ended up buying in Houston. And 10 years later, I hit the goal you're talking about. So it can be done!
@Julie Summons Welcome to BP and great goals! I agree with @Cody L. that San Diego isn't the obvious market for buy and hold cash flowing properties. The hot housing market has created more of a challenge to find properties but it can still be done. On the bright side, San Diego is a landlord's market to command high rents and interest rates are still historically very low so buying a 2-4 multi family property and using the BRRR is a great option. Let me know if you need anything else!
I hear all the time that San Diego is not good for cash flow but what they really mean is that the initial cash flow is not great.
My San Diego, per door, cash flow is great. Average rents in San Diego for SFR have increased almost $500 in the last 3 years and for apartments over $500 in last 5 years. This implies a cash neutral purchase of a SFR from 3 years ago would have nearly $500 positive cash flow today.
I suspect as you hit $10k month cash flow you will find it does not go as far in San Diego as you may suspect. Certainly it will not be enough to live by the beach in San Diego.
Hi, Julie,
I have just recently joined BP, and also live in San Diego. Looking to start investing elsewhere, for now anyway, due to the prices in SD. I have a condo, and plannIng to use equity for the first investment. Let’s connect and brainstorm.
Roman
One recommendation would be to purchase a little further north like Temecula/ Murrieta area. The area is still growing like crazy, and the price is half of San Diego. Rents are rising and the tenants are excellent. Infrastructure is growing here too and attracting companies. What used to be a commuter town, is now a full city in its own right. Excellent schools get people up here and then they love it.
PS- I do have a nice 3 bedroom for under $400K available- tenant occupied :)
Another option is to go the cash flow route in the midwest- I have several there as well.
I would be happy to discuss. I am from SD originally and sold all there to buy in Temecula and out of state.
@Julie Summons and @Roman Lanyak - welcome to BP! I also live in SD, but my partner and I are investing in MFR buy and hold / BRRRR in the Morongo Basin (near Joshua Tree Nat'l Park). Prices are still reasonable, and you can find cash flowing properties.
Best of luck, and let me know if you're interested in connecting.
@Tom Murray Hello, Tom. Thank you for welcoming us, you are the first one! I’d love to meet and bounce some ideas. Would you like to get a coffee, sometime?
Julie - you're in a good position in having a paying job and being able to qualify for a loan. Whether financing a home or investment property the cost to get in is a lot less costly getting in if you occupy. Possible to get into 1 to 4 unit properties with just 3 1/2% down.
Thank you for all the responses 7 years ago ( I know. ... been a long while ) Finally I did it ~ reached Financial Independence and likely retiring from my W2 next year ! Real Estate is definitely a long game and I am grateful for everyone's comments and sharing on my First Ever BP question ! Have a wonderful weekend ~
Thank you for all the responses 7 years ago ( I know. ... been a long while ) Finally I did it ~ reached Financial Independence and likely retiring from my W2 next year ! Real Estate is definitely a long game and I am grateful for everyone's comments and sharing on my First Ever BP question ! Have a wonderful weekend ~
Congrats on hitting financial independence but I feel your post is like a tease that reveals the ending without the path there. The path may help others starting on their journey (but paths age, the brrrr that I heavily used in my path is much more challenging today than it was a few years ago).
Was real estate your path! Did you invest in Dan Diego or non-local? Residential or other asset class? Sfr or MF? Are you living at the beach?
Thank you. oh! sorry not my intent! Ended up buying a 3 unit fixer in South Oceanside, adding 2 ADUs and rented 4 units out long term. Keeping 1 as mid term rental / beach getaway. From property acquisition to final tenant move in took about 2 years. My original post was 2017, after a few more months of analysis paralysis, started actively looking around Pacific Beach area but kept getting "outbid" by cash buyers despite solid lender approval letter. Property values kept going up, pushing my affordability further North or South of PB area. Decided to pivot and get cash ready thru cash-out refi of primary, which ended up being the Luckiest move, as soon after, the rates shot up. Still took another 8 months to actually successfully acquire something that make money sense. The rest was history.