Relocating to San Diego- flip success?

Question

I’m relocating to San Diego (Chula Vista) and was wondering what is working for flippers in this market. What are your biggest challenges? What’s your strategy for success?

Brian Mollo · Answer

Welcome to San Diego! I've been flipping in San Diego for the last several years at a larger, institutional group and now at my own shop. As anyone, anywhere will tell you this is definitely a competitive market, more than most. Of course there are big guys, medium players, and lots of mom and pops (I think Fortune Builders corporate is in San Diego). Additionally, because it's such an expensive place to live in general, there are a fair amount of people with discretionary income or family money who add to the 'investor pool' and need to invest their money. I'd agree that with the high(er) price points, one just has to be careful not to make crippling mistakes being critically conscious of neighborhoods and asset specific attributes. But there is certainly money to be made. There is a fair amount of dated inventory and bringing those up to market value can yield attractive returns. Each flipper is going to have their own strategy, whether it be Agent focused, direct to seller, or a combination of the two. Both can work evident by a number of players in the market. Margins have gotten thin and in the past where you could maybe get away with a mistake or two- now it's a lot harder to make decent profit if you didn't account for 1-2 red flags. I've met a number of people who come to this market thinking they can just simply apply what they've done in other markets, and poof, insta-cash. If their expectations are too high or their timeline or patience are short, it's often too challenging. Just know that the learning curve is a bit longer than other markets, but just keep at it! Anything I can do to help, don't hesitate and good luck on the relocation and new venture!

Greg Dickerson · Answer

Yes however higher price points can translate to bigger profits when you know what your doing. You need to really know the market and make sure you don’t get get caught when things turn as it can happen fast.

David Frandsen · Answer

@Greg Dickerson

Thanks for the info. Yes the higher price points can be challenging for capital.

Greg Dickerson · Answer

Chula Vista is like anywhere else. You have a good areas and not so good areas. There’s lots of competition for good deals and one of the biggest challenges depending on where you’re coming from will be price point. You need a lot of capital to buy and flip properties pretty much anywhere in San Diego.

Justin R. · Answer

Yes to a housing shortage in the low-to-upper mid price points, both in for-sale and for-rent inventory.  The dynamics in the urban areas are much different than in the outer areas, like just about everywhere else in the State and Country.

There's definitely folks flipping, but I haven't been following that market too much so don't have much to add.

David Frandsen · Answer

@Justin R.

Thanks! I’d love to hear more. So am I right that there is a housing shortage? So the new developments are probably working well then?

Justin R. · Answer

@David Frandsen Welcome to SD!  I generally don't flip (most of what I'm doing at the moment is MFR new builds and small SFR subdivisions), so don't have much to say about your specific questions.  Nevertheless, welcome!