Newbie in San Diego with a hard market, how do I make it work?

Question

Hi There,

My name is Summer and I am a TRUE newbie in San Diego. I've been a homeowner 3 times now, but never an investor so to speak. My husband and I are looking to start Real Estate investing, which can be challenging in a market like San Diego. While we've saved up, we don't have a ton of $ to drop on a property. We're looking at starting small with something like a condo to produce + cash flow and work our way up to multi-family units. Right now, we're thinking a buy & hold might be our best option as long as it brings some slight + cash flow and hold out for a little appreciation and buy down on mortgage. There's also areas outside of San Diego, but it seems like everything in So Cal is expensive. I would love to BRRRR, but right now in So Cal, that seems difficult. I recently listened to a BiggerPockets podcast, and it mentions "what bottlenecks you?" For us, its enough $ to get in the game. Hard money is hard to come buy as a first time investor in this economy as I understand it as well. Not against going out of state (within 4-6 hours drive time) to find a + cash flow or BRRRR. Any insight to my thought process would be GREATLY appreciated. Take care everyone.

Summer Noyes · Answer

Thanks everyone for the input. I wish that house hacking was an option for us, but we have a 6 year old and my 69 yr old mother lives with us. I'll definitely look into Tucson. I appreciate all the information.

Tom Ott · Answer

Hello and welcome! Best of luck to you!

Twana Rasoul · Answer

Hi @Summer Noyes and welcome! Investing in San Diego does have a high barrier to entry for investors due to the high cost, but there are ways to get in the market here without having to come up with 20% for a down payment.

I highly encourage house hacking for a lot of the beginners. If you are both up for it you can house hack and buy a property such as a Single Family to live in with an additional ADU to rent out or a multi unit to live in one unit and rent the other(s). This is an easier way to get started as you will have 3.5% down payment options available to purchase using fha loan and even some 5-10% conventional options for the SFR with ADU.

I've been investing for some time now but my wife and I still house hack with our newborn :)

Feel free to reach out with questions.

Andrea Weule · Answer

Hello @Summer Noyes, Welcome to the BP Family! Yes, San Diego is an expensive market (I live in Denver...not quite as expensive, but still pretty high). I do fix and flips and wholesale deals in Denver, but I focus on the Mid-West for our rentals. The numbers work out much better for us. We won't get the appreciation on them like we would in Denver, but our goal is to cash flow for years and years.

If you want to stay somewhat close, I'd maybe explore Tucson...it's a great town with a huge college. Price point would be better and rent should still be pretty solid. Just a thought.

Best of Success!

If you want to stay somewhat close, I'd maybe explore Tucson...it's a great town with a huge college. Price point would be better and rent should still be pretty solid. Just a thought.

Best of Success!

Newbie in San Diego with a hard market, how do I make it work?

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