All Forum Posts by: Brock VandenBerg

Hi Jeff.  Thank you for posting! You are doing the right thing by educating yourself about investing in real estate before jumping in. There are plenty of ways to get started and I have read some really good ideas! Here is my suggestion based upon personal experience. 

If you haven't already, I would highly consider purchasing a property for yourself and renting a room or two for cash flow. I say this for several reasons.  First, I am in the belief that you are better off owning property in Southern California "over the long term" vs. a rental property in the cities you mentioned (yes, I know cap rates are better in the middle states but we are talking long term). Historically home prices and rents have increased much more rapidly in So Cal vs the markets you mentioned.  Second, owner occupied financing is much easier (and cheaper) to obtain then income property loans. Third, managing out of state property isn't easy and can go badly very quickly (and I can vouch for that). 

I purchased my first property 18 years ago in Fremont, CA (outside of SF / Oakland). It was a 2 bed / 2 bath condo that I could barely afford, but which I rented a room to a friend to help with the payment. After a couple of years, I moved to San Diego (kept the property) and used an equity line of credit to purchase another property in which I lived for another 2 years. At about the time of the housing bust (won't lie about 2 months before the crash), I purchased another home to raise a family. I will admit that I was cash flow negative on the 2 rentals (in which the rents were sufficient to cover all direct expenses (interest, taxes, etc.) but came out of pocket to cover 50% of the principal payment on the loan, which I chalked up to an alternative way to increase savings. I have since purchased another property and rent out the third property. The take away is that rents have increased by 2% - 4% per year, property values are up 3%+ per year depending on the property and when they were purchased, and the tenants average 5 years. As I get older, my investment objectives have become more conservative (no longer using LOC to purchase property) with principal paydown being my primary goal. When good investment opportunities come up (mostly lending opportunities), I can always use existing cash or LOC to jump.

As I mentioned, this strategy isn't for everyone. This strategy has worked for me because I didn't necessarily need the cash flow and my objective was more equity growth vs. cash flow. 

Brock VandenBerg

Here are some before & after images of a flip with financed in Concord, CA.

Link to Before & After images

Thank you for the great responses.  I also had the opportunity to speak with some other investors who currently lease their properties in San Diego as short term rentals and most had positive things to say. I think I am going to make the leap and try it out.  I will let you know how it goes.

The tenants are moving out of a rental I own in San Diego and I am considering using Airbnb and similar short term / vacation rental sites to rent it out.  Based on the figures I see from other rentals, I could almost double my gross income with only 80% occupancy. The unit is only 10 years old and is in a clean, family friendly planned community with a pool and about 10 minutes from the beach.

I am interested to hear from other BP members about their experience shifting from long term renters to shorter / vacation renters, hopefully those in San Diego and/or coastal California.  Thanks.

What are your thoughts on these Before / After images we posted for a flip TaliMar Financial financed in La Mesa? The home was originally built in the 1920's and was barely standing when the borrower purchased it.

La Mesa - Before / After Images

We just posted the Before / After images of a Fix & Flip we funded in Vista, CA. The borrower was smart, they were able to sell the large palm in the front of the house. Let me know your thoughts on the renovation.

http://talimarfinancial.com/borrowers/before-after/

Welcome to BP.  Great platform to network.  I run a hard money lending company that specializes in funding fix & flip and construction loans in San Diego.  Please let me know if there is anything that I can do to help you!

Thanks for the information Vilson. I run a hard money lending company here in San Diego that specializes in Fix & Flip and Construction loans. I always have borrowers asking if I could recommend equity partners on deals as I typically only fund the first. I would like to connect with you and discuss ways we can work with one another.  

Welcome to bigger pockets Jeff. You are taking the right step by networking with as many people as possible. I would recommend attending the local real estate networking events such as the San Diego Creative Investor Association (SDCIA), North County Real Estate Investor Association, and FIBI - Del Mar (google for details). 

I run a hard money lending business that specializes in financing fix and flips, construction, and bridge loans. 

Don't hesitate to contact me with any questions...  Good luck!!!

Feel free to give me a call and I can turn you on to some people that would trade your time for some education.

Brock