House Hacking in San Diego?

[Nadia Justo]

Hello everybody,
Could someone tell me wich are good neighborhoods in San Diego, CA? 
Are there currently opportunities for House Hacking? do you think that is a good time to buy in San Diego?
Thanks :)

[Lawrence Potts]

@Nadia Justo,

I'd reach out to local investors and see where they are investing!

Good indication of "good" neighborhoods should be safe, close to good schools, secure jobs nearby, etc. Just imagine what you would want if you wanted to live somewhere and go off of those necessities.

House hacking is always a good opportunity. It depends also on your situation. It can be an awesome time to buy or a terrible time to buy, but if you can't buy, you can't buy. 

Hope that answers some of your questions!

[Dan Heuschele]

Quote from @Nadia Justo:

Hello everybody,
Could someone tell me wich are good neighborhoods in San Diego, CA? 
Are there currently opportunities for House Hacking? do you think that is a good time to buy in San Diego?
Thanks :)

 Definition of good varies depending on what you are looking for:

- Liberal: ocean Beach and hillcrest

- Hip: Hillcrest, Pacific Beach, North Park, Bankers Hill, down town

- Good/great Schools: Poway, Carmel Valley, North County coastal

- party: Mission beach, downtown, Pacific Beach.

- Upper class beach: Coronado, Ja Jolla, Del Mar, Encinitas, carlsbad, leucadia

- Upper class inland: Rancho Santa Fe, Fairbanks Ranch, parts of Poway, Parts of RB.

- Most likely to outperform market: West Chula Vista (huge development project already funded), Imperial Beach (cheapest beach properties in US for hundreds of miles)

- Conservative: Much of the east county.

Rural: Much of East county, Ramona, parts of Poway.

My two favorite areas are Poway and encinitas, but I expect virtually everyone to have their own favorite areas.

As for it being a good place to house hack. For a long term RE investor, San Diego has always done awesome. Does this imply it meets everyone's (or even most people's) view of good place to invest? No. It has a high cost of entry. Virtually all RE purchases have negative cash flow at purchase. The regulations are tenant friendly. San Diego had the most severe Covid eviction moratorium in the country. You were only allowed to evict for safety reasons. The tenant could have stopped paying, moved in a dozen of their friends into the unit each with their own pet, started growing pot on the property and you could not have evicted them (by law passed by the board of supervisors, so county wide). If you hold long term, you historically would have made a lot from appreciation, your rent to purchase ratio would be outstanding (A result of crazy high rent increases. Core Logic shows the average SFH rent increased $600/month last year), and you likely had good/great tenants (a result of the housing shortage and how tenants understand that as a poor tenant they will have difficult time finding housing in San Diego).

My answer is it is a good/great market to house hack if you plan on holding 10 years or longer and an OK place to house hack if you plan to hold at least 5 years.  I would avoid purchasing at this time if you expect your hold to be less than 5 years.  It is very different market than the high initial cash flow midwest markets.

Good luck

[Matt May]

@Nadia Justo,

There are absolutely opportunities to house hack in San Diego. We help people house hack every year in SD county. I am in the process of helping 2 people do it right now. Do you live in San Diego? And what makes you interested in house hacking?

It is always a good TIME to buy in general. It really depends on the specific deal and your personal situation. 

[Mauricio Salom]

I have house hacked on the west side of Chula Vista and love it. I have found that in that area you can find more SFR's that have already been set up to house hack and ready to be rented on day 1 or take very little work to divide also granny flats / ADUS are also very common in Chula Vista. I am also eager to see what the J st Marina development project does for property values. There are always opportunities for house hacking. With interest rates up buyers have slowed lowering home prices and with more people asking is now a good time to buy it lowers your competition and right now you can avoid the bidding wars and likely even get the seller to pay for closing costs or buy down your interest rate.

[Nadia Justo]

Hey,
thanks everyone for your responses. I am wanting to start my path as an investor and it helps me to have different points of view.
@Matt May I currently live in North California. I decided to use the House Hacking strategy to start with less money down, and I find the San Diego area to be a place worth looking at. Seeing if the current instability could favor the buyer, since I feel that when everything is more solid, entering the San Diego market is much more difficult (I was also guided by my heart and my desire to live there 😂)
@Dan Heuschele Thank you for such valuable information. My plan is to buy and hold forever or until needed. I would like to know more about the new developments; where can I find this information?

[Twana Rasoul]

Hi @Nadia Justo There's lots of good areas to house hack in San Diego but your budget will determine the type of property and neighborhood you will be able to purchase in. I house hack myself and love it in the BayHo area...You can house hack in coastal area a block from the beach or way out in land if you want a larger lot.  

If you are buying for long term buy/hold then its always a good time to buy...I just purchased a 4plex last month myself...Usually you want to be able to hold for 5 to 7+ years....those who come to San Diego and only plan to stay 2-3 years and then sell are usually better off renting.

[Dan Heuschele]

Quote from @Nadia Justo:

Hey,
thanks everyone for your responses. I am wanting to start my path as an investor and it helps me to have different points of view.
@Matt May I currently live in North California. I decided to use the House Hacking strategy to start with less money down, and I find the San Diego area to be a place worth looking at. Seeing if the current instability could favor the buyer, since I feel that when everything is more solid, entering the San Diego market is much more difficult (I was also guided by my heart and my desire to live there 😂)
@Dan Heuschele Thank you for such valuable information. My plan is to buy and hold forever or until needed. I would like to know more about the new developments; where can I find this information?

>I would like to know more about the new developments; where can I find this information?

The development I referred to can be found by doing an Internet search of Chula Vista Bayfront Redevelopment. It is the same development that @Mauricio Salom referred to as J St Marina development.  

West Chula Vista  have as likely to out perform market because 1) the already funded coastal development 2) how many cities have cheaper properties coastal than inland?  Chula visa is unique.  The coastal properties are old and the area has never gentrified.  These properties are ripe for gentrification and due to the large development effort is very likely to occur.

By the way none of my RE investments are as far south as west Chula Vista.  I believe the market will out perform the San Diego market, but it is a bit far from my units (none of which is significantly south of highway 8).  

Good luck

[Eric Yu]

Hi! I don't personally operate out of San Diego, but my good friend/colleague @Nicholas Coulter can provide a ton of value for the San Diego market. He's currently house hacking there as well :) 

[Nicholas Coulter]

Quote from @Nadia Justo:

Hello everybody,
Could someone tell me wich are good neighborhoods in San Diego, CA? 
Are there currently opportunities for House Hacking? do you think that is a good time to buy in San Diego?
Thanks :)

 There are! I am currently hacking in Sd and have done the same for some clients! We should connect and I can help you narrow down your search! 

[Kenneth Donaghy]

@Nadia Justo I've helped many househackers in San Diego, some of them buying multiple househack properties with me. I also use to live in NorCal. What makes SD super cool is each neighborhood has a different vibe. I usually match my clients vibe to their budget and neighbor. So yes there are great opportunities to househack SD, a few different strategies I suggest based on your budget. And to answer your last question, yes i do think its good time to buy in SD especial if you are househacking.   

[Shannon Allaire]

Quote from @Nadia Justo:

do you think that is a good time to buy in San Diego?
Thanks :)

 Hi. I house-hack in Oakland, CA. Interest rates are way up, which makes buying anywhere more expensive now. Consider your purchase over the long-term: You can use conventional financing now and get a rate of ~6% and then refinance to a lower rate after rates go down. You'll have to pay ~6% for however long it takes for rates to decrease, but at that point you'll have racked up equity in a home; you'll never get that time back. I refinanced from 4.5% to 3.1% 4 years after my home purchase and lowered my monthly payment by ~$400. Good luck.

[Greg R.]

I would love to know more about your situation. What kind of price range did you have in mind? What kind of place are you wanting to find, what kind of area/ quality of home are you expecting?

Most people looking to house hack are not wanting to spend a ton of money on a house. Not sure if that's you, but if so we can eliminate all beach communities. For instance Ocean Beach only has ONE listing under 1.25m, and it's a 2/1 750 sqft cottage. That said, you're going to be inland... either straight back to El Cajon/ Lakeside/ Santee, or South Chula/ Otay area. You could go north as well, there are a few slightly reasonable places to live in Escondido area & San Marcos. 

But even then, if you want something turn key that you (and others) will actually want to live in, I don't see you touching anything for under 600k. In Santee, there's only one house listed that's under 600k and it's in extreme need of updating & maintenance. In Chula Vista there are only 2 listings under 600k, both small and need a lot of work/ updating.

My search criteria is house, so I excluded condos/ apartments. If you're interested in a condo/ apartment you will have some more options. 
 

[Ryan Thomson]

@Nadia Justo I can't help with San Diego, but House Hacking is amazing. Here are some resources I found really helpful on my journey.

1. For podcasts I really like the Huse Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

3. The Book on House Hacking Strategies by Craig Curelop is also a fantastic book

[Maxwell Ventura]

@Nadia Justo

If you're planning to hold for a bit it's generally always a good time to buy. With rates up from where they were last year you could potentially get into a "buy down" scenario. 

re: House hacking, you can look at a SFR w/ adu play or a small multifamily 2-4 unit scenario. If you don't have too much for a down payment consider an FHA 3.5% option on a duplex. Because of the self sufficiency rule, you'll be hard pressed to find any FHA options that'll work on a triplex or quad.

If you have more questions regarding demographics / geography / which neighborhoods look promising over the foreseeable future I can weigh in w/ my opinion. 

Best of luck to you!


  

[Monica Der]

My favorite spots in San Diego for house hacking is 

1. Seaport Village - right by the water, a little touristy, great restaurants (especially Puesto mexican restaurant) and larger commerical buildings, walking distance from the gaslamp district. 

2. Little Italy - nightlife and of course great restaurants and bars, younger crowd

3. Dog beach - for the dog lovers it is the best

[Nicholas Coulter]

@Nadia Justo I am currently house hacking now in SD! Happy to answer any questions. 

[Ryan Thomson]

@Nadia Justo You asked: "Is it a good time to buy in San Diego?" That is a very difficult question to predict, but 

If you are paying 2k/month in rent then now is a great time to get into house hacking. Instead of throwing that money away every month you can pay down your mortgage and own and asset that will appreciate over the long term. Not to mention if you rent out the bedrooms you’ll get all of the benefits of owning a home AND pay less towards your monthly mortgage than your rent of 2k.

Thinking about the market… I wouldn’t be too concerned with a house hack for two reasons.

1. 1. If your plan is to scale and buy a property every year or two then you will cost average into the market. Eventually, you will buy a property when it is near the bottom for prices. Since you (and no one else who talks like they do) actually knows what’s going to happen this is the best strategy for buying an investment if you continue to buy over the long run. You can’t time the market.
2. 2. If you wait 12 months and get lucky and the house is worth 20k less now, you will have spent 24k in rent over that time period.

[Maxwell Ventura]

Quote from @Nadia Justo:

Hello everybody,
Could someone tell me wich are good neighborhoods in San Diego, CA? 
Are there currently opportunities for House Hacking? do you think that is a good time to buy in San Diego?
Thanks :)

Investors acquire property in all markets. Just a matter of finding the right opportunity, and for your given situation.

Starting your RE portfolio via house hacking is a great way to get into RE investing because you're able to come in w/ little money down and can potentially use surplus units rents to help to qualify.

Hope this helps ~