Has anyone ever House Hacked in Southern California

Question

Hey BP Fam, I am looking to buy a Duplex in So Cal. Most likely San Diego Area or Orange County. I just wanted to ask if any of you have done a house hack deal here. I want to see if it possible to get my half of the rent down as much as possible. If you have done it, is it better to have one long term tenant, STR or medium Term Rental. I want to have as little monthly rent as possible on my end.

Any insight will be appreciated.

Twana Rasoul · Answer

@Miguel Horta I am currently house hacking myself and introduce you to dozens of others currently house hacking multifamily here in San Diego....All of these people vary from renting out the additional unit(s) either STR, Medium term or long term tenants.

Generally speaking if you want to generate the most amount of income you will STR the second unit which will give you the most revenue...my clients who STR their other unit(s) generally have their entire mortgage paid for or pretty close to.  The second option is to do medium term rental and rent out your unit furnished to the likes of Doctors/Nurses 3-6 months at a time which will give you less income (generally 20% or so) than short term rental but more than long term rental.  Last option is the long term tenant which will have the least amount of rent compared to the other 2 options but also the least amount of turn over.    I have a combination of long term and medium term rentals in San Diego and there is certainly pros and cons to both.

Miguel Horta · Answer

Thanks Twana, Eric and Nick! Glad to know its possible. Going to start looking in deeper to see what I can do to get this done.

Eric Yu · Answer

Hey Miguel! My friend @Nicholas Coulter actually just acquired a house hack in San Diego. He's also an agent & great resource if you want to talk more about house hacking & minimizing monthly rent.

Dan H. · Answer

I do have some fear of statewide STR regulations at some point in the future.  Also each city in San Diego county may incorporate STR regulations.  Regulations are a risk even if there are currently no regulations or existing regulations where your property is located.

In city of San Diego (Mission Beach) we have a STR that has been run as a STR annually since 1999 by our family that did not get a STR permit.  It was not chosen in spite of having maximum lottery entries.  Maximum lottery entries was for STRs that have been operated for 5 years, paid their occupancy taxes, and had no significant complaints.  The city required the owner/operators to show the tenant history for those 5 years; you would think they should have this information.  Note even though the STR has been operated for 23 years, it was not trivial to obtain this information because I changed PMs recently.  I was able to get 7 years of data, so this unt was not selected in spite of having the maximum number of lottery entries.

There is an organization called San Diego STR alliance that advocates for STRs.  We donated to a fund supporting their legal efforts before one of our units was not selected.

Good luck

Nathan Harden · Answer

Hey Miguel,

While I don't have any real-life experience with your situation, I do know that down in San Diego County they are very picky about STRs. I know of people who have been trying to get their STR approved by the county for a LONG time. If you can get into the STR game in San Diego, great! We all know how hot of a tourist location it is.

Miguel Horta · Answer

Nice Job Baird! Gets me motivated to get my deal this year. STR would be the ideal situation if i can get it.

Baird King · Answer

Hey Miguel. I’m on my second house hack. Both duplexes with stand-alone houses. First was Santa Barbara (purchased in 2020). Rented out the smaller unit for about 60% of the mortgage then moved into the small unit and rented out the bigger unit for 80% of the mortgage. We since moved and turned the small unit into a furnished 30-day rental (not regulated as an STR in any market unless regulated by an HOA; at least to my knowledge). Now the small unit covers 80+% of the mortgage and with the LTR rents in the front unit, the property is a Cashflow King.

We currently live in a duplex in Ventura that we purchased July 2022. We are living in the smaller of two units that we rehabbed first while we fix up the larger unit. Once that is finished (end of this month), we will move into the larger unit and rent out the smaller as an STR. Ventura is pretty relaxed on STRs 😊. We conservatively expect the STR income from the smaller unit to cover the mortgage, but there is a good chance it will do better than that. I should say that the both properties needed major rehab work. Always happy to discuss further. Best of luck!

Nicholas Coulter · Answer

Hey! I am house hacking in San Diego right now in a duplex in North Park! I’m happy to help answer any questions for you!

Miguel Horta · Answer

Thanks for the Detailed feedback Dan! I appreciate all the replies. giving me good info how i want to take on this project.

Peter Eberhardt · Answer

It is absolutely possible to get half your rent covered if not more with a househack here, more likely if you get a distressed duplex and take a few months to fix it up yourself. I bought a condo in El Cajon and have 60% of my total expenses paid for by my roommate. Keep in mind that when I bought it 5 years ago only 40% of expenses where covered but I have increased his rent a little bit.

I could increase it to market which would be 80% coverage of monthly obligations but I am a nice guy. Point is, make sure to factor at least 3 years into the future with your UW, just because it doesn't pencil now doesn't mean it won't in a year or 3. Also, MTR is where the good and easy money is at right now if you do not want a LTR

Has anyone ever House Hacked in Southern California

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