All Forum Posts by: Donald E Appleberry

Solid deal. San Diego's average time on market is getting even shorter. Great for flips for those willing to take them on. Congrats on the success. 

I live in San Diego and I’m having trouble convincing myself that multifamily is a good investment here in San Diego. For example I saw a single family home in Otay Ranch that is a 3 bedroom 3 bathroom house for 515,000. I could easily rent out the two extra rooms and each roommate would have a private bathroom. I’m think wouldn’t it make more sense financially to house hack a single family then to house hack a multifamily due to the cost? Anyone beg to differ? I’d love to hear feedback, thank you.

Hey man,

I'll play devils advocate and give you the feeback I give my clients looking at house hacking. Also this is usually a very long conversation as your goals in REI and personal situation/preferences will dictate which you'd ultimately prefer. So bare with me and please forgive me if I don't dive into the many variables that come down that making that decision in one post.

San Diego real estate is one of the best places for a buy and hold investment IMO. Generally, Multi-family is more expensive than single family. So for a 2-4 unit here you most likely won't be cash-flowing.(Unless it's a value add situation.) In A LOT of peoples minds, especially people just getting into real estate investing, this makes the deal seem not worth it at all since they can cash-flow a multi family property in other markets like the Midwest a couple hundred dollars a month.

I'd challenge you to take a step back and look at the big picture. You're getting into a MF property that will serve as a long term investment. You're in a very desirable market, You're dramatically decreasing your monthly overhead for said property, and you're reaping the tax benefits. No, you may not be cash-flowing a couple hundred a month, but you now own and asset for the cost of a regular 2bd/1bth apartment in most areas. Maybe even less than that. Also, if you consider loan pay down, appreciation, depreciation and the fact that you have more personal space/security (compared to house hacking a SFR) you'll see that leveraging a MF property earlier than later will pay off down the road. Just because your house hack doesn't cash-flow day one, doesn't mean it's a bad investment. Paying for where you live isn't a bad thing. Haha. 

We aren't in a market where buying a property for 10% down will get you immediate returns(Generally). But we have the benefit of being in a market a majority of people want to live. Paired with consistent weather, vacation destinations, military bases bringing in potential renters and OOS monies, beachfront rentals, Billion dollar developments and a variety of other things, you can bet money (the down payment or leveraged benefits on your MF property) that your investment is bound to be a beneficial one. Not to include the fact that you get to enjoy the investment personally since its a house hack. I won't hit appreciation here too much since I recommend not basing your investment solely on it. What's the saying? "Appreciation is the cherry on top of a good deal." I'd just say that in this market it's two cherries and some sprinkles.

I already know the first thing that pops into everyone's mind when you mention appreciation and the answer is - "No, there is not a looming Real Estate market crash." At least not one that is justifiable based on the market inventory vs demand and in-place mortgage systems. You know, the facts. Side rant over. Hahha. 

Now for the SFR approach. There are typically only 2 ways to get a cash flowing property in this market. BRRR/Value add and house hacking a SFR. House hacking a SFR is not for everyone, and finding tenants you can live with can be challenging. Even close friends can be difficult tenants. If done correctly though, you can live for free and have some extra money in your pocket. I have clients that are doing both and each have their issues. But it's the best way IMO to get started in a market like this.

I'm free to talk more if you'd like. PM me and we can jump on a phone call. As I said, there's a lot of personal preference that goes into that decision. Unlike a typical investment, you're going to be living there. So just because the numbers look good, doesn't mean the property is going to be good for you and your situation. You're also investing your livelihood into the the property.

Hey Tom,

A lot of my past and current clients are in that area and I know it well. Investments include a triplex, duplex, and a remodeled house hack that is currently in escrow. 

Incredible job man. Keep up the good work and kudo's to your team. 

Hey Alex,

Fair Warning. I'm entirely bias for San Diego. Haha. I've lived and worked here for 6 years. I was a Reconnaissance Marine stationed at Camp Pendleton while moving into REI. Now I'm an agent in downtown San Diego.

 As others mentioned above, I'd check out La Jolla in San Diego County. Incredible homes and the walkability is King. That can be said for a lot areas along San Diego's coast though. As far as investment, I've been preaching west Chula Vista for quite sometime. There was never a reason to live there so East Chula is actually more expensive than West. There's a $1.1B resort going in as well as more restaurants, bars, and condos. Going multifamily here is a solid play. However, you'd be sacrificing the "luxury living" you'd get in La Jolla. As well as some of the other things on your list. Depends on which you're going to prefer and both are long plays. La Jolla is the safer bet for your investment approach I think. Since it's established as a higher end neighborhood and has everything you're looking for already. So parking your investment there will play out well, just maybe not as much as Chula. 

We did an open for the Iconic "Razor House" that sold to a very popular music artist last year with Million Dollar Listing in La Jolla. Only reason I'm mentioning that is to further elaborate the quality of the neighborhoods in the area if you aren't very familiar. Google Search La Jolla Farms Road and take a street view tour. 

Value add is also very profitable there. An investor I talked with bought a good property for just over $1M and flipped it for $5.5M. I don't know the numbers pertaining to his renovations and it took 8 months to sell, but I'd bet he's not complaining now. 

I live in downtown and the walkability is something I love here. I live about 10 blocks from where I work but choose to walk instead of drive due to that. There is a homeless issue, but nothing like L.A's. You could get a very nice condo, but that would take away from your investment side due to some of the more prestigious buildings have a 1k a month HOA. A lot of clients say it's worth it, but that's a very opinionated statement only you could decide on.

North Park and Bankers hill are other neighborhoods I love in San Diego, and I haven't even got into Coronado. Haha. Honestly, I could talk SD Real Estate all day, but I'll end the post here so I don't overload you with info. If you'd like to talk more feel free to pm me. 

Congratulations on your success and cheers to the future successes to come. 

All The Best. 

Hey Gina,

To keep it short and sweet since you've been given so much info already.

-San Diego - House Hacking and Value add are really your only two options *Typically if you're looking to for a cashflow positive investment here. San Diego is also very good if not one of the best for buy and holds. Dead horse has been kicked again. 

-OOS investing markets - Phoenix has been a good market for a while now. I personally like the Kansas City, Mo rental market. 90% of the larger investors I talk to or work with have or have had a portion of their portfolio there. I invested in Springfield, Mo and that was a pretty good market as well. 

Love your mindset about the OOS investing. If you're in a position for the risk and can manage it well if it goes south, I say go for it. 

All the best. 

Hey man,

I definitely agree with your "feeling". Based on how much development is going on in oceanside, the fact that you have a major military base right next to you that will keep bringing in and recycling new people every year, and even looking at vistas development - it's not crazy to think that EVERYONE in the Tri-city area is preparing for the high appreciation that appears to be coming to Oceanside and the Tri-city area as a whole.

If you're dead set on building more cashflow, I'd recommend out of state. Unless you can put a 20% down on a property in West Chula Vista. Even then, it most likely wouldn't meet what you're trying to net. Kansas City, Mo is a great rental market I'd check out for sure.

All in all though, I'd say hold it. However, we are in a sellers market. So, it's a really good time to sell. It's a tough choice, but either way I think you'll be in a good position.

Hey thanks for the shoutout @David Pere!

What's up Anthony! There are several VA investing strategies for the San Diego market. However, like you said this high cost market. So typically buying a duplex and renting one side won't cover your entire home expense. Doesn't mean that it's a bad deal. San Diego is a long play and utilizing the VA loan to pick up a property you can truly enjoy AND house hack for less than the monthly of a small apartment is pretty incredible. Especially since without the VA loan, it would be a very difficult market to break into.

PM me on here and we'll jump on a call. Love that you're already on top of your licensing and REI strategy before you're here! We can talk the agent side as well.

All the best. 

For sure man. I live in downtown, so when you get out here hit me up and we'll grab a brew or something. 

What's up guys. We were doing this for a bit before COVID and I'm pushing to get it going again ASAP. Tentative date set for June 6th. We'll see if that will be doable per regulations in place at that time. 

I'm a prior Reconnaissance Marine and moved into real estate full time after I got out. I'll be hosting with David Pere who's currently still active duty and has built a solid military based investing community that cuts out the B.S. I wanted to bring that online community to in person meet ups and events so here we are! 

Come have a coupled drinks with other investors in the area. New and Experienced. We have a pretty diverse group in regards to investment strategy. There's always someone who knows something you don't, the key is to connect with them. 

**Yes I'm an agent and No I will not be soliciting any services to you. Anyone at the event strictly for soliciting or self promotion will be removed. When I first started I fell into a "Guru Trap" as I call them and spent way too much money for information and guidance I think should be easily accessible to guys and gals just starting out.

Hope to see you guys there and I'll continue to update as San Diego updates procedure.