All Forum Posts by: Ben Kagel

Quote from @Joshua J Cawthorn:

Hi Ben,

Some great input on this thread about your increased rate on the condo killing your current cash flow. That's inevitably accurate, you may even be negative. However, San Diego is a better appreciation market rather than a cash flow market. I think the better question (as Mr. Heuschele alluded) is in regards to the cash you pull out: can you increase your overall net cash flow, even with the increased rate/decreased cash flow on your current condo? Building equity in two properties is probably pretty valuable. Building equity in two southern California properties probably pretty valuable. 

If you're investing for immediate cash flow, then I bet investing in some of midwest markets is a "safe" bet. If you're pursuing wealth, I personally think investing in appreciation is going to be more lucrative. I feel positively about the long term future of southern California real estate. Moreover, the prices in 2022 will (likely) be so deliciously appealing in, say, 2042. 

"Oh wow, you bought a place in San Diego for $1M @ 7%? What an idiot," says no one in twenty years.

100% agree. I understand your point about overall net cash flow. That's a really great point as I dig into the analysis.

I'm not opposed to investing in SoCal more. I've lived in LA, OC, and SD counties, so I'm very familiar with the market. I guess I've been looking through the lens of investing in cash flowing property, which is not a strategy that typically succeeds in coastal CA cities. But you're spot on about appreciation. If I had a nickel for every time my dad said "I should have bought that place in OC/SD back in the 80s," I wouldn't need to invest in anything. 

I'll be the first to admit that the equity I have is due to pure luck of my timing. I'm definitely leaning toward playing it safe for now since I'm just starting out and the market is so uncertain. 

Good to know! Thanks for that insight. 

Thanks, agreed. I'd have to crunch some numbers, but I think you're right - my cash flow would disappear from a refi. 

You and the tenant would have to mutually agree to modify the terms of the existing lease, so you’d have to give the tenant something of value in exchange for paying higher rent. The tenant can reject your offer and keep the current lease in place. I’m not sure what you could offer that would be enticing enough for a tenant to agree to pay higher rent. If the tenant is paying on time and not causing problems, it might not be worth disturbing the existing lease. Better off waiting until it expires.

Hi BP Community, this is my first post after lurking here for a while soaking up as much as I can. I am an accidental landlord with a condo in San Diego, CA. I bought in April 2020 and recently moved to the Bay Area for a new job, so my condo is now rented out. (I also am renting my current place... it's so expensive here.) The SD condo is cash flow positive (~$300/mon.) and has gained significant appreciation the last two years. I would like to use this an opportunity to begin my real estate investment journey. 

I'm wondering if it makes more sense to fund my next purchase by using the equity in the condo or by continuing to save up. I bought the condo for $670k with 10% down (no PMI) @ 3% interest rate. Latest comp - same exact floor plan as mine - sold for $900k in July and another back in May for $1.125M (!!!). I definitely see the market there cooling down though recently.

I think even conservatively I could access $150k+ in equity from a cash-out refi or a HELOC. I've seen tons of advise about pulling equity out using those financing tools, but I'm wary about high interest rates and a potential housing market decline. Alternatively, I could tap into my savings and hope to have close to $100k to invest by the end of next year. I'm leaning toward the latter because I don't think it's worth losing my current mortgage rate, and I'd like to take the next year to continue educating myself (hopefully I avoid analysis paralysis!). This is probably the safer route. Looking for some insight.

As for my target market, I plan to invest out-of-state because unfortunately my local market is the most expensive in the country... fun times. I'll save that for my next post! Thank you!