Success With Luxury House Hacking

7 Replies | San Diego, California

Hi BP, has anyone had success in luxury house hacking in the San Diego area, specifically coastal north county (Del Mar-Carlsbad)? It's best to invest where numbers make sense but live where you want. Luxury house hacking combines the two and seems interesting especially with the progression of ADU laws in certain San Diego cities (and not in certain cities). Thanks in advance!

I have no answer for this, but super interested to hear some answers. I have an opportunity similar to this in North County right now and scared to take the leap.

I know people who bought condo’s at very good prices to where they are not cash flowing but at least break-even. One of them in San Diego and the other one in Spring Valley.

They bought them for primary residence, no investors. I’m interested on hearing someone who has accomplished this systematically.

If the idea is to buy an SFR and STR the extra space, that seems like the normal AirBnB path ... or, at least what AirBnB started as. If the idea is to buy a small multi, live in one, and STR the extra units, that sounds easier than STRing and not living there.

Throw in an ADU in the mix and it gets interesting - maybe live in the ADU to start and later upgrade to the main residence?

I'm not involved in STRs, so not offering first hand experience. I'd be cautious of any situation where I'm signing up to run an STR business out of my home and the numbers don't work otherwise - running that business will get old at some point, and there's got to be a path beyond that. I suppose if you're STRing one unit and making it work, it's not too much a stretch to move out and do the same with the other.

Originally posted by @Casey Murray :

Hi BP, has anyone had success in luxury house hacking in the San Diego area, specifically coastal north county (Del Mar-Carlsbad)? It's best to invest where numbers make sense but live where you want. 

I've got a strategy that works for luxury house hacking, but for most it is hard to qualifying (doctor loans). My wife and I are going to be moving to SD from LA next year, employing our strategy. I'd be interested to hear your ideas/strategies about the ADU parts. We are currently looking for a like minded realtor in SD and will be in SD next weekend (Sept 6-8). You might be a fit, reach out if you'd like.

 

@Brian Carignan Interesting to hear about unique loans for doctors. We closed escrow a couple weeks ago on a SFR with detached ADU as an investment property. I think it's more common now to have properties with ADU's per recent change in California legislature but need to know how each city treats ADU's which varies across San Diego county.

I live in Encinitas and sometimes AirBNB (STR) the extra room, or our house when we go on vacation. People do rent both. Renting just the extra room covers our housing cost, but you have to deal with having people in your space, which can actually be nice, or also a pain. I have found that most people that share the space only use the house/room for sleeping. You can also easily rent a room for $900++ on a monthly basis. Closer to beach and having a private bath boost those rents. A 2 bedroom place around here rents for $3000. In Encinitas, the City will give you approved plans for a detached ADU, you can get a studio, up to 3 bedrooms and pay no permits either. You just have to get the site layout approved, etc. They are doing this to boost "low income housing". You can also have an additional attached ADU, but need to comply with size rules (up to 25% of main house) and are supposed to get permits and approvals. So if you bought a large enough house with a layout that you could chop off a couple of rooms to make an ADU or 2, you could potentially have up to $6000 a month without the headaches of the STR. Prices are high, but this is a great area so rents are high too.