Looking to invest in San Diego, any tips?

OP

Specialist · Bothell, WA · Member since 2014 · 268 posts · 80 votes

9y

Very cool @Dan H., thanks for the input. I'm willing to go anywhere in the county, didn't know escondido had those kinds of values. What other working class areas would you recommend?

Casey Murray

Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes

9y

@Gustavo Munoz Castro I second what @Dan H. suggested about Escondido. I'm actually from Escondido but live in Carmel Valley now. You could find more of the working class areas going inland. Along the 78 East freeway you have San Marcos and Vista and going 8 East you have La Mesa and El Cajon. I feel you get the most bang for your buck with the inland properties.

2 Reply

Andrew Johnson

Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes

9y

Gustavo Munoz Castro I don't invest in San Diego but do live here. You will get younger professionals that live in North Park but I don't know any that live in National City. I think the counsel of "look in East County" (Escondido, San Marcos, maybe Vista) could be good advice. Drive the areas, there's a mix of good and bad in most of those cities/communities. I have no idea how the family situation would or wouldn't impact your decision but traffic down here isn't exactly fun.

OP

Specialist · Bothell, WA · Member since 2014 · 268 posts · 80 votes

9y

i hear you on the traffic, luckily I mostly work from home. Where do you invest?

Brian Lacey

Rental Property Investor · Hailey, ID · Member since 2015 · 218 posts · 143 votes

9y

For an upcoming neighborhood, Barrio Logan east of Downtown, could be worth a look.

3 Reply

Sarah D.

San Diego, CA · Member since 2015 · 273 posts · 226 votes

9y

Id second La Mesa, as it is an up and coming area with young families and also MFR opportunities. I don't know if Santee has much in the way of 2-4 units but it's definitely another inland area that is improving.

4 Reply

Michael Conway

Investor · San Diego, CA · Member since 2015 · 52 posts · 27 votes

9y

If you are willing to build, you may look into purchasing an SFR and adding a granny flat with a 203k. (Garage conversion, etc). I looked into this and FHA will allow this, also the new granny flat laws just went into affect for california allowing "accessory dwelling units" on SFR lots sized up to 50% the square footage of the primary residence. They eased up on the restrictions and permitting process as well. There are plenty of properties in the La Mesa area that will fit this model. Just have to keep in mind long term that technically your not allowed to rent both units, it's supposed to be owner occupied.

I like La Mesa in that price range because its close to the city, safe, and will continue to gain popularity over the next few years with the younger generation of renters.

3 Reply

Michael Conway

Investor · San Diego, CA · Member since 2015 · 52 posts · 27 votes

9y

FYI, I wouldn't trust Trulia's crime maps.

OP

Specialist · Bothell, WA · Member since 2014 · 268 posts · 80 votes

9y

Thanks for the input @Michael Conway. I agree, the crime map can be a little misleading with North Park "red" and most of National City "green", but it does help distinguish areas with high violent crime that really shouldn't have it (war zones) where there is no nightlife or reasonable explanation. Did you find it was super misleading for most of San Diego?

Michael Conway

Investor · San Diego, CA · Member since 2015 · 52 posts · 27 votes

9y

The color map I feel is misleading... I would rather live in a "red" area where there were 30 crimes for jaywalking/drunken peeing, than the "green/yellow" area where there is a violent crime every month. Any urban area is going to show up on Trulia as high crime compared to suburban areas where nothing is happening, its all relative. Pretty much all of downtown san diego is red... that doesn't mean it's not all safe. I lived in Talmadge, very nice neighborhood, but 2 blocks away was a very high crime area. As an outsider, without knowing this area, I would shy away based on the Trulia map. Just my 2 cents.

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

9y

Originally posted by @Gustavo Munoz Castro:

Very cool @Dan H., thanks for the input. I'm willing to go anywhere in the county, didn't know escondido had those kinds of values. What other working class areas would you recommend?

My expertise is the Escondido area but I do not see any reason why El Cajon, Spring Valley, Santee would not be similar. Note you likely do not want to get too rural (Jamul, Alpine, etc.) as the amount of tenants is less. So you may be able to purchase cheap in those rural areas but I suspect the rent versus purchase price is not as favorable. I view Ramona as somewhere between areas like Escondido and Jamul which makes Escondido better but with the right purchase Ramona may be able to work.

Good luck

2 Reply

Matt R.

Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes

9y

Originally posted by @Gustavo Munoz Castro:

Greetings BP folks! My wife and I will be moving to San Diego next month, we're expecting our first baby and want to be closer to our families for a bit during the first year (I'm originally from across the border in TJ and have "some" knowledge of SD). We own a couple rental properties in the Seattle area and would love to get a new property in the San Diego area while we're down there. Low and behold, the stories about San Diego being an expensive market are all true. We have access to an FHA loan for $440K and have about $100K available for downpayment and/or rehab. Our goals are to get a property where we can live and/or house hack, and once we move away at least break even as a rental. These are the options I see for us after doing some basic research:

1) Larger home with a granny flat. Putting the rents together would approximate breaking even or maybe just above. Something like this: https://www.redfin.com/CA/San-Diego/350-Las-Flores.... We did this with a home in Seattle and it ended up a great deal in a C neighborhood.

2) Two homes on one lot. Variation of the above, something like https://www.redfin.com/CA/National-City/National-C.... Less permitting issues and the like.

3) Off-market. Find off market SFR's or MFH's that need rehabbing and try to get those with hard money/private loans or maybe even 203k. I have experience in prospecting for sellers so this could be an option, not sure if we can get to my price point though.

Main issue I see are the neighborhoods. Trulia crime map says south National City is "safer" than North Park but I just remember folks saying to stay away from National City. Are there any "up and coming" neighborhoods I should be taking a look at? We're pretty adventurous (we house hacked our last home in Seattle in a C neighborhood and it now cash flows $800 per month).

What do you think of our plan? Crazy? Doable? If we're not planning on living there long term, is it ok to buy in a C neighborhood in San Diego?

Smart move. San Diego is #3 nationally for total returns ( cash flow+equity) since 2000. Residential vacancy is 2.1% and commercial vacancy is the lowest in 18 years. SD is also #6 nationally in new tech jobs. I expect there will be good opps in the granny flat thing/corporate short term/airbnb and or keep in mind a longer term future tear down/conversion for condos etc...Also figure another NFL team will be coming if you can get ahead of the stadium location. Good luck with your search!

Lamonte Johnson

san diego, CA · Member since 2013 · 2 posts · 0 votes

9y

Does anyone have any experience and input on city heights area?

Louis A.

Investor · Chicago, IL · Member since 2015 · 70 posts · 27 votes

9y

I haven't seen anyone mention (East) Oceanside -- There has been a ton of new investment west of Interstate 5 and prices have sky-rocketed in the past few years. With time, that may spill-over into the eastern parts to drive some appreciation upside. Also, not to mention that there are plenty of properties in that area with your price range.

Sarah D.

San Diego, CA · Member since 2015 · 273 posts · 226 votes

9y

@Lamonte Johnson City Heights has a lot of challenges because of the population, lots of Section 8, and has a history of violent crime. It also has a TON of culture and great food because of the population, and lots of community and government support to improve the area. There are a few pockets that resemble North Park with beautiful restored homes, owner occupied, etc. I think it's 50/50 where it will be in the next 10 years. Personally I don't think the area will get worse, but I'm not sure it will get much better either. People are betting on it being the new North/South Park, but I'd suspect Golden Hill and the area Southwest of there along the 94 will improve next because of proximity to downtown and uptown areas. Just my best guess, and I live in PB so what do I know.

3 Reply

Roger Poole

Rental Property Investor · FPO, AP · Member since 2016 · 46 posts · 9 votes

9y

Great information yal Im born and raised in San Diego living in almost every area. I know my city even if its very expensive it just requires harder work for those searching. Nothing comes easy in SD but the weather

Lamonte Johnson

san diego, CA · Member since 2013 · 2 posts · 0 votes

9y

@sarah dumm thanks and everything you said sound pretty accurate.

Parker Cox

Independent Insurance Agent · San Diego, CA · Member since 2015 · 138 posts · 56 votes

9y

@Gustavo Munoz Castro there has been somewhere between 50-100million pledged for urban development moving east from Barrio Logan all the way to Lemon Grove.

I have multiple investors, flipping, infill development and buy and hold(mostly 2-4units) in that area getting stellar returns.

For most of those areas, it is a street by street thing in terms of safety, but I also feel safe walking around that area and I am spend most of my life in a suit.

I live in Spring Valley/Rancho San Diego--basically the southeastern most point of suburban San Diego--where housing prices are nearly spot on the 440k.

Where I live, you can find houses (mine being one of them) that should at minimum break even for rent upon leaving, and it is a nice area, very close to La Mesa and just 15-20 minutes from Downtown.

I don't know enough about conversions to give you information, but that's what everyone else is here for.

I have a young family as well and want to hold my property forever, so I was looking through the same things at the time. At the very least it is worth taking a look.

Best of Luck

John Reardon

San Diego, CA · Member since 2013 · 36 posts · 22 votes

9y

I would consider places like grant hill, Sherman heights. Barrio Logan. Those are very close to downtown but still offers long term upside that is getting good buzz. I would also consider golden hill but very hard to find any "deals" there. As someone that used to live near Seattle, I can tell you it's more expensive and more competition. If you don't mind live away from town consider east and north east of the county. Stay away from coastal as the numbers don't make sense at all.

Account Closed

Real Estate Investor · Rancho Santa Fe , CA · Member since 2016 · 323 posts · 107 votes

9y

Hi , @Gustavo Munoz Castro, I am Chilango, Grew up in Mexico City came here a few years ago.

Escondido its a good place, if you are gonna be working close by. you might get 1 lot with 2 houses for $440k, I seen deals like that. in the past.

OP

Specialist · Bothell, WA · Member since 2014 · 268 posts · 80 votes

9y

@Account Closed, hey, thanks for the tip, that area will definitely be in my sights. I work from home mostly so commute is not an issue.

Jarred Curry

Investor · Black Hills, SD · Member since 2015 · 30 posts · 15 votes

9y

@Gustavo Munoz Castro

Hey Gustavo,

If you are looking for investment properties, I work for an investment real estate brokerage in San Diego and we find 6-10 off-market discounted properties per month. Let me know if you are interested in having access to our properties.

Best of Luck!

Jarred

Jimmy Watson

Investor · San Diego, CA · Member since 2014 · 65 posts · 39 votes

9y

I personally just bought a beautiful, 3 bed 2 bath condo built in 2005 for 333,000$ in east Oceanside right off the 76. I could rent I out for anywhere from 2150-2350 per month and my break-even is 2250$ at this point (living in it first). Hopefully in a few years when I move, it appreciates and rents go up... then I'm making a profit! Bought it as a VA loan and had investment property in mind in the distant future. Point of saying all of that is there is plenty of upside in Oceanside and some good bang for your buck- with a lot of quality neighborhoods. Biggest benefit? RIGHT next to a massive military base that isn't going anywhere! Military = constant supply of renters that will never dry up, no matter how bad the economy gets.