I hope everyone is having a good morning, my name is Christian. I recently found out about bigger pockets podcast and I just got submerged into all the good information. I don’t own any property but I’m really excited to start. I live in San Diego, CA. And as many people know it’s expensive to live here. I want to start small and go from there, is a condo a good way to start? Thank you for the responses.
1 Must have low HOA due.
2 Must have ample parking spaces
3. Must be appreciating property value
4. Must at least breakeven or cash flows.
Condo HOA & assessment fees typically kill cash flow.
To your success!
Hey @Christian Cruz
For someone looking for massive ROI I would definitely steer clear from condos. There are only a few specific scenarios in which I would recommend them as an investment. Have you considered the famous house hacking strategy? I think you will find it much more lucrative due to less capital upfront, more room for appreciation, more control over your asset, and zero fixed fees by a third party. Hope this sheds some insight.
@Sam Shueh thank you for the tips!
Hi @Christian Cruz , a condo can be a good first investment.
1. If you bought a condo five years ago in San Diego, depending on where, the value may have more than doubled.
2. Right now you are paying rent? Therefore you are creating zero equity.
3. You are active duty. Collecting a bah, and entitled to a VA loan. Both you can take full advantage of, and start creating equity. While doing so, start strategizing you next investment.
4. Sometimes the HOA fees will be equal to what you may pay for water, sewer, trash, insurance(patrial), what you would pay on a SFR. Sometimes you may get a nice gym, pool, and I have even seen cable and internet paid for with HOA dues.
5. FYI: I'm currently helping multiple active duty service men and women stationed in and around San Diego identify properties they can househack, and/or save some of their bah, while they create equity. You have earned the right to use these entitlements to your advantage. Doing so will help start your path of success.
@Christian Cruz . Most people say no but I say yes. I have five condo's in my holdings and I promise you the HOA fees are a blessing. All of the outside of the complex is taken care where as with a SFH or even a duplex that is a major time consumer and money pit. Lawn care and landscaping is not something a tenant wants to do and if allowed to do will generally do a poor job. My guess is that proper lawn care and landscape maintenance will cost you $2500 to $3500 a year. If I pay $300 a month for HOA that is only $3600 a year. Less insurance cost with a condo ( usually by half). Amenities like pools, gyms, tennis courts, etc come with condo's and attract young professionals and retirees. If you rehab a condo right their is not much maintenance inside. And also less rehab cost. Nice tile, nice paint job, done!! Cash flow I think is no different looking at overall expenses. Just make sure the condo you buy is well maintained and has a high amount of money in reserves so you don't get killed with assessments.