All Forum Posts by: Dan H.

Arlen, it's in Ramona. Market is $1200 for nice units w a pool and carport or garage and a few more amenities. Mine are renting for $1050-1100 with more basic setup. I think I'm at or just below market on two but not a great deal.

Appraisal was from a bank, I see Escondido and spring valley units going around $700k that are similar.

Feel free to look for yourself it's 834 A St. Ramona, Ca

I claim to be an expert on Escondido duplexes to quads. I do rent surveys evert few months of Escondido properties. I did one one month ago for 2 BR units. The cheapest non apartment 2 BR in Escondido at that rent survey was $1700. I put ours on market at $1700 wanting to rent it as soon as it was ready. I had 3 tenants ready to move in when the unit was ready (1 did not pass our check so it went to the second). In Escondido studios go for over $1k. I do believe Ramona is lower than Escondido but I question how you did your rent survey? I think your rent is likely low but I do not claim expertise on Ramona rental market. If you have performed actual rent survey then you may be correct but if you have not actually looked at rent prices on Zillow, trulia, Craig's list I think you are low.

If you decide to sell, PM me ideally before committing commission to a realtor.  

Good luck

I do not know your definition of a tough market. My definition of a tough market is one that is difficult to obtain a decent ROI. San Diego historically has had a great ROI for buy and hold investors so I think it has been an easy market. clearly I think San Diego is a good to great RE market but I suggest you look up San Diego RE appreciation for any duration you desire and calculate the return assuming 25% down. Then realize sometimes a purchase requires less than 25% down. Finally realize rent appreciation typically correlates closely with property appreciation. In recent years rent has gone up $50 to $100 per month each year. So a buy n hold REI that barely cash flows could be cash flowing hundreds of dollars in a few years. Final bonus for California investors is prop 13 will ensure minimal property tax increase so as profits and value increase the taxes stay fairly flat. Virtually every buy n hold investor in San Diego that was able to not sell in the down cycle has had a great ROI no matter when they purchased the RE.

 The guys that throw it are active on BP and advertise the open house.  I suspect one of them will see this thread and post when the next event is if it has already been scheduled.  If that does not work one of my follow words is San Diego and it seems to catch virtually all of them as well as this thread.  Most of the time the events are scheduled a couple weeks out but the last one was much shorter notice.  

In other words I think it likely that someone will let you know the next event.  Maybe I will make it and we Powegians can meet.  I'm in North West Poway almost in RB. 

@Luis Alfaro There is a near montly on-site meetup run by @parker cox that you can meet some local people and learn a little.  There is no selling, just a knowledge exchange.

My answer to your question on best REI is that San Diego buy n hold has historically had a great return especially when the property has been financed. Look up San Diego RE appreciation over various durations to convince yourself of this. Calculate what the return is if the property was purchased with 25% down. Then realize that sometimes you can purchase with less than 25% down. Also realize that rent appreciation typically correlates with property appreciation. Add in the Prop 13 tax protection. There are very few investments (not just REI investments) that have returned the ROI of San Diego buy and hold RE investments. I suspect, even though you live here and know that properties appreciate, that you will be surprised by the historical return assuming 25% down.

Good luck.

@Anand S. I live in Poway, am an engineer, and invest local. I can make great a logical case for investing local (actually you could simply look for many of my past posts). I do admit your entry point finance wise would be a significant challenge but there are virtually zero markets that have a better ROI than San Diego for buy and hold purchasers. You were able to experience this on your initial Poway purchase that is now a rental. My claim is easy to verify as you can look up the appreciation on San Diego real Estate for a wide range of years and compare the appreciation to other markets and compare just the appreciation to what could be expected in cash flow in a better cash flow locale. Add in the cash flow and San Diego becomes even a better choice. Note a San Diego property that barely cash flows today is likely to be cash flowing by about $50 to $100/month more for each year of ownership.

I do not do flips but I have been to local investor Meetups on places that are being flipped and include some creative ideas t increase profit margin.  There is a group on BP that has nearly monthly Meetup in San Diego that you can learn quite a bit.  Every one of these that I have been to has been a flip (I understand they have had some that have not been flips but i did not attend those) and I have learned something at each one and I would have learned more if I was flipper.  There is no selling, just information exchange and donuts/coffee.  The following people are associated with it:

G. @Parker Cox.

I think you can learn something from attending some of these Meetups whether you choose to invest locally or go out of area.

Good luck.

@Justin R. was recently flipping a large mobile home I believe in Linda Vista.  Never heard final results to know how it worked out.  It was projected to have a good return.  

I see some great list prices on mobile homes so lower entry point. 

Good luck. 

The only way they lost is if they sold as virtually all Coastal So Cal markets are above their pre 2007-2008  high.  If they sold they were likely over leveraged as in the area where I have my rentals and the area my family has their rentals (certainly not all Coastal So Cal areas) there was no rent decrease during that RE depreciation cycle.  People moved in with parents or took on additional roommates lowering the demand but there were so many empty bank owned units that the supply was also down.  Net effect is our rents were flat during that time.

So I tell anyone investing in coastal So Cal that historically the values will rise (always have) but that in the short-term there are cycles (periods were properties depreciate).  I warn that they must have the means and fortitude to ride out the down cycles otherwise they can sell low and lose money.

I have purchased a couple times at near market high times (1992 and 2003) that had the properties initially lose value (the 2003 purchase at its low was down more than $100K).  Both properties are above purchase prices and the 1992 purchased property is up close to $400K on a $167K property. 

So if you buy and hold long term in Coastal So Cal (i.e. did not sell when the markets have depreciated) it has historically been virtually impossible to lose money (if you try real hard you may be able to find an area where you could have owned 10 years and lost money but you would have to try pretty hard to find that area and that 10 time span).  Verifiable fact.  Try and find any 10 year or longer window of time and a Coastal So Cal where you could have lost money on buy n hold assuming that it was at least neutral on the cash flow.

@Anthony Ciulla I do not know how much effort you want to spend on looking at what can be done but our modest unit is 732 Jamaica Court in Mission Beach.  The unit directly across the court (the sidewalk is the court, the streets are the allies) - I do not know the address but maybe 731 or 733 Jamaica Court, was built less than 10 years ago.  They have an upper deck that is partitioned such that both units have some upper deck.  The upper deck has hot tubs (one for each unit).  It shows a fairly recent, fairly high end upgrade of a duplex that was fully to code when built and a great way to use the upper level while staying within height limits.  It is basically a high end entertainment deck.

my family has a San Diego beach duplex.  I would be leery of grand fathered in.  I suspect the extra units were not completed because the permits could not be obtained due to some limitation (parking, height, number of units).   So do you homework in this area. Ideally purchase the plans with the property. The unit across from ours did this when owners got divorced after having plans approved for much larger duplex - replacing smaller duplex.  They completed the approved plans but the new plans had more on-site parking than the property originally had. 

Also you do not indicate if you were planning long-term renters or vacation rental.  The family duplex is 1.5 blocks from the ocean in mission Beach.  We have tried both short- term vacation rental and a high breed of short-term vacation rental in summer and rent to students rest of year.  We typically do slightly better with the high breed.  To be real successful with short-term rental (have it at high occupancy rate) you need to be closer to the water than our units.  

Good luck

First, my view is that the initial property is not over priced but as an investor I would look for better.  However I suspect if you purchased it you would not regretting it a year from now. 

Second those that advocate cash flow over appreciation are simply unaware of San Diego property value history. Historically San Diego has out performed virtually every other US market for RE ROI for buy n hold investors. This is fact and can be looked up. This better historical RE ROI is for durations as short as 5 years and as long as 50 years (probably longer).

I have purchased properties at 0 cash flow upon purchase that have made close to $100k/year and now cash flow.    I would not expect close to this return on a property purchased today but the cash flow rules investors would have passed on these properties in 2012/2013 because of the lack of cash flow. 

So you can ignore history and look for cash flow and invest in an areas like Cleavland or Tenessee or you can recognize the unique market of coastal So Cal. Historically San Diego RE ROI has been much higher than those better cash flow locales (verifiable fact). I see nothing that indicates that the San Diego market going forward will be different than history indicates (but history does show RE cycles so you need to know you can weather a down cycle).

Good luck