All Forum Posts by: Mark Frattini

@Kevin Gamboa

Feel free to connect. 

Quote from @Matt Toeneboehn:

Hey everyone,

I'm an active duty, military physician and have an upcoming move in JUN2022. I'm tired of paying rent and hope to house-hack and continue to invest in rentals in the future. I'm married, have 3 kids, and a dog and think we will need a 3 bed/1-2 bath to feel comfortable as our live-in unit. I do not have orders yet but we will likely be moving to an expensive area (ie. California, Hawaii). More than likely we will only be living at that location for 1-2 yrs max before moving but I plan to hold onto the property and continue to rent it out. We have excellent credit, no debt and approximately $25,000 to put towards a down-payment if necessary with additional reserves. I should be able to utilize physician as well as VA loans for a low down-payment. I've been doing a lot of research via books and podcasts and feel like it should be possible but the market seems difficult right now and a duplex in the San Diego area is hard to find under $800,000, which is a hard pill to swallow for our first house purchase. I recently listened to BP episode #560 and am currently thinking the rent-by-room strategy might be a good idea after we move out of a single family house if I'm unable to find a good deal on a duplex...   I don't feel comfortable renting out rooms with my kids in the same house.  My long term vision is to obtain a significant passive income from multi-family properties to allow me to cut back on hours (I love my job and don't want to quit!) and possibly work part-time so I can spend more time with family.  Any other ideas or strategies that I should consider?  Thoughts? 

Thanks for your help!

Hi @Matt Toeneboehn,

In your position I would personally lean towards the single family home route and here's why. When you have a family, kids, pets do you really want to share your yard, driveway, garage, common wall with a tenant? Go after a single family home in a safe neighborhood, nice backyard, with good schools for your kids that has a short commute to work. Plenty of those houses still exist under $800k in San Diego. I wouldn't stretch your budget for a fixer duplex that needs work, in a not so great area and have to share my privacy with a tenant. This would be totally different conversation if you were single in med school or residency. 

Also, I don't know what the San Diego housing market will look like when you're ready to buy but right now if you had a max budget of $800k you're really looking at houses/duplexes in the low to mid 7s which will likely get bid up closer to the 8s.

Stay in the home for a year or two and then consider what the best exit strategy options are at that time. There is a big demand now for providing medium term rentals for traveling healthcare workers. I used to work in pediatric cardiology before real estate and recognize the strong demand for travel positions right now. This would work well in a single family home where you could rent out the bedrooms or entire house. In the meantime you still are paying yourself to live there through principle pay down, your equity is increasing, you get the tax benefits and the utility of having a personal residence for your family.

@Eric Mcginn

I personally wouldn't go the turbo tax route with 9 rentals. Pay for a CPA who is going to help you save the difference anyway. I can recommend one here in San Diego. They work with a lot of real estate investors and know their stuff. 

@Michael Stowers

Here's are my thoughts: You're paying a premium for a property that is turnkey and recently flipped. What's your exit strategy?

You could do better on buying a property in San Diego where you create equity by fixing it up and pushing up the rents. Plus you will be able to see and touch the property anytime you want. You could also self manage it saving you 10%+ on gross rents. This just seems like a lot of risk with narrow margins for an out of state investment.

@Hal MacKenzie

I second what Jeffrey mentioned about using the medium term rental as a way around some of the possible upcoming STR restrictions. You might be able to get away with both strategies. I used to work in healthcare before real estate and I'm seeing a big demand in medium term rentals for travel nurses and other healthcare workers. They are drawn to San Diego for the high pay rate and they usually receive some type of housing stipend, food and even car allowance. Every contract is different but their housing is typically at least partially covered. They are not here to party, work long hours and just need a place to sleep and relax.

Cardiff is in south Encinitas and Leucadia is located in north Encinitas. Carlsbad is a good option as well. Both of these are coastal north county San Diego and are in high demand. What draws you and your wife to these two areas? I would also take a look into Oceanside. It's about as far north as you can get for the San Diego coastal cities but your dollar will stretch a bit further up there. Depending on your budget Solana Beach could also be an option.

I see this is an old post but rates are on the rise. Make sure you get your REFIs done before the first of 3-4 increases this year. First one will be in mid March 2022 If you need a local lender recommendation feel free to reach out.

I have a local lender (San Diego) that can get pretty creative when it comes to rental properties. Send me a message and I'll see if he can help.

@Maddy C.

Depending on your comfort level for commute time, neighborhood preferences etc. you should be able to find something that works for under $700k. There are a lot of different down-payment assistant options for first time homebuyers. Make sure you work with a lender who is familiar with the different programs that are available.

Hello @Bhavya Shah

You've already been given a lot of great information here. @Dan H.'s post was very well put. Ideally you will find a property that you can add a bit of value and give yourself an equity buffer. Price appreciation in San Diego for 2022 will not be like the last couple of years. Go after those diamonds in the rough. Find something that needs a bit of sweat equity. If you are renting now I would address that before anything else. Find a house hack or multi-unit and live in the smallest one that needs the most amount of work. Look for a SFH with an ADU or at least potential for an ADU. This will allow you to get the best rate and terms on your loan. Rates are heading up which will be a factor to consider when analyzing your numbers.

Hey @Matt Morgan

Happy to provide you with contact info for a few cleaners in San Diego. Feel free to connect.