All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Start here
  • Education
    Forums

    Learn from and contribute to 659K+ real estate discussions

    BiggerPockets Podcast

    Listen to weekly interviews with investors & entrepreneurs

    BiggerPockets Blog

    Delve into 8,800+ articles by experienced investors

    Member Blogs

    Read original articles by BiggerPockets members

    Guides

    Master the ins and outs of fundamental real estate topics

    The Money Show

    Listen to weekly interviews that will help get your financial house in order

    Webinars

    Sign up for this week's free webinars hosted by experienced investors or view previously-held webinar recordings in the Archives

    Videos

    Browse our library of real estate related video content

    Free Course

    Experience The Financial Independence Blueprint video series - a free four-part video series

    Topics
    Property Management Property Types Finance Strategy Finding Deals Business Operations
  • Network
    Members

    Search over 1,270,000 members across BiggerPockets

    Companies

    Explore over 31,000 real estate-related companies

    Real Estate Agents

    Find an investor-friendly agent near you

    Hard Money Lenders

    Pinpoint lenders near you with our nationwide database

    Events

    Find upcoming real estate events and meetups near you

    Jobs

    Browse real estate job opportunities in your area

  • Tools

    Calculators

    • Fix and Flip
    • Rental Property
    • BRRRR
    • Rehab Estimator
    • Wholesaling
    • Mortgage Payment
    • 70% Rule
    • Airbnb Calculator

    Services

    Find a Contractor Get a Mortgage Loan Tenant Screening External Link

    Additional Tools

    FilePlace

    Download presentations, spreadsheets, contracts & more

    REI Resources

    Dig into thousands of curated real estate tools & resources

    Calculators
  • Marketplace
    Properties For Sale

    Buy and sell real estate deals or seek out partners, financing, etc.

    Find Foreclosures External Link

    Search this comprehensive database of nationwide foreclosures

    Ads, Jobs, and Other

    Advertise your real estate business, deals, financing & more

  • Bookstore

    Featured Book

    Recession-Proof Real Estate Investing book cover

    Recession-Proof Real Estate Investing

    This easy-to-follow guide will show you how to make money during all of the market’s twists and turns! Accomplished investor J Scott dives into the theory of economic cycles and the real-world strategies for harnessing them to your advantage.

    Get the book now

    Real Estate Books

    • Flipping and Estimating Bundle
    • How to Invest in Real Estate
    • How to Sell Your Home
    • See All Books
    Real Estate Books

    Shop books covering real estate investing and personal finance.

    Lease Agreement Package New

    Don't spend $1,000 on a lawyer!

    Real Estate Forms

    Lease Agreement Package New

    Don't spend $1,000 on a lawyer!

  • Plans
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowReal Estate Deal Analysis and AdviceArrowSeeking opinions on a possible deal in San Diego
  • Newest Posts Arrow Down Light
    • Newest Posts
    • Unanswered Discussions
  • Trending Arrow Down Light
    • Top Discussions
    • Trending Discussions
  • Reviews & Feedback Arrow Down Light
    • Local Real Estate Forums

      Real Estate Forums near you

      • New York City Real Estate Forum 1.3K Posts 191 Discussions
      • Norfolk Real Estate Forum 350 Posts 35 Discussions
      • Baltimore Real Estate Forum 1.8K Posts 223 Discussions
      • Norwalk Real Estate Forum 7 Posts -1 Discussions

      View all Local Real Estate forums

    • General Info
      • Real Estate Success Stories 77K Posts 3.7K Discussions
      • Real Estate Not-So-Successful Stories 523 Posts 41 Discussions
      • BiggerPockets Summer Reading List 92 Posts 14 Discussions
      • New Member Introductions 488K Posts 56K Discussions
      • Real Estate Quizzes 696 Posts 21 Discussions
      • BiggerPockets Money Podcast 675 Posts 50 Discussions
      • BiggerPockets Exclusive PRO Area 16K Posts 3.0K Discussions
      • FAQ Forum 132 Posts 9 Discussions
      • BiggerPockets Webinar Discussion Forum 459 Posts 15 Discussions
      • Questions About BiggerPockets and Official Site Announcements 42K Posts 4.1K Discussions
    • General Real Estate
      • Investor Deal Diaries 17K Posts 863 Discussions
      • Buying & Selling Real Estate Discussion 423K Posts 58K Discussions
      • Completed Deal Diaries 5.6K Posts 1.9K Discussions
      • Renters Discussion 44K Posts 5.1K Discussions
      • Military Investing 5.4K Posts 530 Discussions
      • Construction & Remodeling Diaries 6.1K Posts 1.0K Discussions
      • Do it Yourself 32K Posts 3.5K Discussions
      • Get Foreclosure Help - Stop Foreclosure Forum 6.6K Posts 910 Discussions
      • Home Owner Association (HOA) Issues & Problems Forum 6.2K Posts 910 Discussions
    • Reviews & Feedback
      • Real Estate Deal Analysis and Advice 131K Posts 18K Discussions
      • Ask About A Real Estate Company 24K Posts 2.7K Discussions
      • Real Estate Guru, Book & Course Reviews and Discussions 28K Posts 2.9K Discussions
    • Investor Basics
      • General Real Estate Investing 144K Posts 19K Discussions
      • Real Estate Investor Marketing Help & Advice 46K Posts 6.5K Discussions
      • Starting Out 290K Posts 41K Discussions
      • Investor Psychology 21K Posts 1.6K Discussions
    • Landlord & Tenant Forums
      • Mobile Homes & Mobile Home Park Investing 19K Posts 2.3K Discussions
      • Landlord Forums & Rental Property Questions 358K Posts 39K Discussions
    • Foreclosures
      • General Foreclosure & Pre-Foreclosure Forums 33K Posts 5.2K Discussions
      • REOs 17K Posts 2.2K Discussions
      • Short Sales Questions 17K Posts 2.1K Discussions
      • HUD, VA, and Tax Sales 10K Posts 1.5K Discussions
    • Real Estate Strategies
      • Real Estate Development & New Home Construction 19K Posts 2.6K Discussions
      • Tax Liens, Notes, Paper, & Cash Flows Discussion 34K Posts 3.9K Discussions
      • Rehabbing and House Flipping 110K Posts 13K Discussions
      • Rent to Own a.k.a. Lease Purchase, Lease Options 15K Posts 2.3K Discussions
      • Short-Term and Vacation Rental Discussion 22K Posts 2.0K Discussions
      • Innovative Strategies 27K Posts 3.4K Discussions
      • Real Estate Wholesaling Questions & Answers 137K Posts 18K Discussions
      • 1031 Exchanges 8.7K Posts 1.4K Discussions
    • Commercial Real Estate
      • Multi-Family and Apartment Investing Forums 96K Posts 10K Discussions
      • Commercial Real Estate Investing Forum 36K Posts 4.8K Discussions
    • Business Basics
      • Goals, Business Plans & Entities 25K Posts 3.5K Discussions
    • Real Estate Technology and the Internet
      • Real Estate Technology, Social Media & Blogging 16K Posts 2.3K Discussions
    • Loans, Mortgages, Credit Lines
      • Private Lending & Conventional Mortgage Advice 105K Posts 14K Discussions
      • Creative Real Estate Financing Forum 50K Posts 7.5K Discussions
      • Real Estate Crowdfunding Forums 5.6K Posts 384 Discussions
    • Financial, Tax, and Legal
      • Property Insurance Questions & Discussions 11K Posts 1.8K Discussions
      • Tax, Legal Issues, Contracts, Self-Directed IRA 100K Posts 15K Discussions
      • Personal Finance Forum 18K Posts 2.0K Discussions
    • Real Estate Professionals
      • Contractors 18K Posts 3.7K Discussions
      • Real Estate Agent Forums 47K Posts 7.0K Discussions
      • Bankers, Lenders, and Mortgage Brokers 12K Posts 1.9K Discussions
    • Real Estate Marketplace
      • Marketplace 227K Posts 88K Discussions
      • Real Estate Events and Happenings 57K Posts 12K Discussions
    • Off Topic
      • Housing News & Real Estate Market Discussions 15K Posts 1.8K Discussions
      • BiggerPockets Real Estate Investing Summit 2.0K Posts 107 Discussions
      • Off-Topic 43K Posts 5.3K Discussions
Start a Discussion

Seeking opinions on a possible deal in San Diego

9 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
  • 1
David Tankersley
  • 64 posts
  • 16 votes

David Tankersley
Wholesaler from Anaheim, California

posted over 4 years ago

Hello BP world, 

I have a lead in the Mira Mesa area of San Diego that I hope will work out, but need some opinions as this should be my first deal. 

It's a 5br, 2.5 bath. 2180sf SFR home.

The seller is asking for $460K and is firm on this.

this seems to be in line with low-en comps from the area, but then I see that average prices in the area are $485k. However, many comps also lean to $550k and up.

The seller did have this listed at 550k as of March, but says he de-listed in frustration after his last offer fell through due to bank financing issues.

I have not yet seen the property as of yet, but hope to see it today.

based on this limited information so far, does this look like a reasonable deal?

Jassem A.
  • 1.9K posts
  • 514 votes

Jassem A.
Investor from West Point, Virginia

replied over 4 years ago

Here's the only cheaper 5/3 I saw:

840 Capricorn Way, San Diego, CA 92126 at 399k (or 245k starting auction)

Pricing seems appropriate.  Not sure if it would be easy to find a tenant that could cover the monthly mortgage but there could be some appreciation in the future.

Antonio Gonzales
  • 143 posts
  • 38 votes

Antonio Gonzales
Lender from San Diego, California

replied over 4 years ago

@David Tankersley  

Mira Mesa is a popular area and we have done a few flips in the neighborhood over the years. It depends on location, age of home, scope of work needed, and detailed comp analysis. It has potential and seems to be worth checking out. We are based here in San Diego and I have lived here since 1996. 

Once you have better idea of Seller's motivation, there may be some negotiating room that isn't strictly focused on price. Feel free to reach out with any other questions.

John Hostetler
  • 62 posts
  • 31 votes

John Hostetler
Accountant from Encinitas, California

replied over 4 years ago
Originally posted by @David Tankersley:

Hello BP world, 

I have a lead in the Mira Mesa area of San Diego that I hope will work out, but need some opinions as this should be my first deal. 

It's a 5br, 2.5 bath. 2180sf SFR home.

The seller is asking for $460K and is firm on this.

this seems to be in line with low-en comps from the area, but then I see that average prices in the area are $485k. However, many comps also lean to $550k and up.

The seller did have this listed at 550k as of March, but says he de-listed in frustration after his last offer fell through due to bank financing issues.

I have not yet seen the property as of yet, but hope to see it today.

based on this limited information so far, does this look like a reasonable deal?

David,

What is your intention for this property -- buy / hold? With an assumption of $2,500 in rent (based on Rent-o-meter), 5% vacancy factor, $5,500 / year property taxes, $750 / year insurance, 12% maintenance and CAPEX reserve, and self managed you are looking at about $2,000 / year cash flow if financed at 80% LTV, 4.5% interest rate, 30-year fixed. The CAP rate based on these assumptions is about 4.1%.

However, many will caution you on this site that expenses will approach 50% long term with any rental property, so with those numbers in mind you will be looking at a 3.3% CAP rate and negative $1,500 / year cash flow. This is probably a realistic figure if the property has ANY significant deferred maintenance, which most properties sold at a discount do.

Appreciation potential? Sure ... but that's more speculating than investing in my opinion. 

If you are looking to flip I highly doubt there is enough room there to make it work. 

David Tankersley
  • 64 posts
  • 16 votes

David Tankersley
Wholesaler from Anaheim, California

replied over 4 years ago

Thanks you all for your input so far.

I am looking to wholesale this property, perhaps to a re-habber.

David Tankersley
  • 64 posts
  • 16 votes

David Tankersley
Wholesaler from Anaheim, California

replied over 4 years ago

I'm confused as to why this may not be doable.

According to Realist, the numbers look good:

RealAVM™ (1): $548,583 Confidence Score (2): 85

RealAVM™ Range: $493,725 - $603,441 Forecast Standard Deviation (3): 10

Is this not valid information to consider?

Jassem A.
  • 1.9K posts
  • 514 votes

Jassem A.
Investor from West Point, Virginia

replied over 4 years ago

It's a big risk either way.  Much safer ways to invest half a million I would guess.

John Hostetler
  • 62 posts
  • 31 votes

John Hostetler
Accountant from Encinitas, California

replied over 4 years ago

David,

I am not familiar with how Realist values the properties. Is the RealAVM based on the average home in average condition? If so, what are your projections for an ARV on this home? A quick search of the area shows me that indeed there are homes that have sold in the high $500s to very low $600s, with one outlier at $720K (right on canyon.)

I am no expert (!), but I believe for a rehabber to make sufficient money on this home, they are going to need to be into the home for about 83% of the ARV. So as an example, if they sell at $600K, the most they can spend, purchase price + closing costs + rehab is about $498K. That leaves precious little for a rehab of a 5-bedroom home, perhaps $30K. Adjust your numbers accordingly if you think the ARV is higher (or lower.)

So whereas the home itself may be purchased at a nice discount off of retail, it doesn't appear to me to have enough of a margin to wholesale to a rehabber. Please let me know if you have questions on my calculations. 

John

David Tankersley
  • 64 posts
  • 16 votes

David Tankersley
Wholesaler from Anaheim, California

replied over 4 years ago

Thank you John,

   I was wisely steered to some very similar information by a mentor.

The average comps that I see are at 530k, making the numbers even worse.

I'm either just going to tell this client that the numbers just are not there for investors, but perhaps if he can find a cash buyer simply looking for a live-in home he may get lucky. Then perhaps I'll call him in a month and see if he's ready to settle on a lower price.

Alternately, I could offer to market this at 470k'ish, looking for a 10k profit, and see if anyone bites andpossibly seek a best offer, In this case I would market for live-in buyer with cash. This is a loooong shot by any means but this could work as long as the seller understands that I have no cash commitment should this not work out. If it doesn't work, Maybe then the seller would be willing to budge.

Any thoughts on this?

John Hostetler
  • 62 posts
  • 31 votes

John Hostetler
Accountant from Encinitas, California

replied over 4 years ago

I have zero knowledge or experience as a wholesaler, so I will kindly bow out as to your strategy from here. 

Good luck!

  • 1

Top Contributors

Dennis M.
Dennis M.
Erie, pa
9.29
Score
Adam Scheetz
Adam Scheetz
Staten Island, NY
4.73
Score
Jaysen Medhurst
Jaysen Medhurst
Greenwich, CT
4.69
Score
Jon Crosby
Jon Crosby
Rocklin, CA
3.94
Score
Michael Tripp
Michael Tripp
Los Angeles, CA
2.92
Score

Trending Discussions

  • Should I report this agent to the Board of Realtors or?
    123 Replies
  • How many of you have bought a note this year ?
    46 Replies
  • California to make "Solar "mandatory for new Homes!!!!!!
    82 Replies
  • Sceptical Wife, Who Asked for Reassurance Before Investing
    28 Replies
  • Should we wait or go for it?
    47 Replies
"
Close Thin

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here

Already have an account? Click here to log in

Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • Perks
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • Google+
  • YouTube
  • Instagram
© 2004-2019 BiggerPockets, LLC. All Rights Reserved.