All Forum Posts by: Mark Frattini

@Faraz K.

Learn how to take advantage of the current market conditions. A lot of buyers are sitting on the sidelines because of the fear and uncertainty in the marketplace. Right now there is a lot of focusing on the negative and watching what other people are doing. The majority want to buy when the sentiment and price are at their peak. 

Be greedy when others are fearful and fearful when others are greedy. 

Hi @Ali K.

Let me address a few of the negative points. Since you already own property and have a investment portfolio this should make sense.

- high interest rate - most believe these higher rates are temporary and will come back down after inflation is under control. You have still have MANY options that I would consider low risk and would give you low rates today or in the near future. 

- high price to rent ratio in San Diego- Since this is your primary I wouldn't be too concerned. Also, rents in San Diego will continue to increase should you need to rent it out in the future. 

- giving up cash flowing assets - This would be a way to diversify and move into a more appreciating market. 

- unnecessary transactions costs - Do you have to sell in order to buy? You could save on the selling transaction side if you could hold your properties in Minneapolis.

I would need more info to give you the best information on neighborhoods. Details like kids, commute, parks, transit needs etc. would be helpful to get you more dialed in. Without knowing any of this info check into the neighborhoods around Balboa Park. This area is very close to downtown.

If you're interested I put together a list of resources on the different cities and neighborhoods in San Diego that I give to anyone who is looking into moving here. 

Quote from @Paul D.:

Thanks @Mark Frattini. Can you break down on what you mean by right keywords and one photo listings (needing rehab?).

No listing photos = opportunity. There will be fewer buyers interested as most will want to have a general idea of the layout and what the inside looks like before scheduling a tour. This could also be an indication the inside is a disaster, it might be tenant occupied or have a LA that's apathetic. This is not always the case but it's worth peeling back the onion.

I have about 20-30 phrases I use in the MLS for my clients depending on the property they are after. This works especially well with investors as it helps filter out listings outside our criteria while bringing in ones that might be overlooked by other agents.

@Dave Clark

The insurance company is "Personal Umbrella". Confusing name since it's not just for individuals, they will cover properties held in an LLC as well.

@Paul D.

Know which properties are zoned to good schools. Use the right keywords in your MLS search that will bring out some of the "hidden" investment opportunities. I would avoid looking at attached homes if possible. Investigate the listings with only one photo. Since rates just received another increase check with your lender to get an updated quote.

Learn how to use this high rate environment to your advantage. Date the rate marry the home.

@Mary Ainsworth

There are many good lenders in San Diego. If you would like the name of a great one that I work with send me a connection. He's local to San Diego and has been helpful to my clients. I would highly recommend calling him and asking questions especially if this is your first property.

@Mary Ainsworth

Use 2% as a general rule to calculate your closing costs as a BUYER. When running your numbers on properties in San Diego make sure you have an idea what the new property taxes and insurance will be. If the current owner purchased the home many years ago what they paid in taxes is not what the next buyer is going to pay. The taxes will be reassessed at the new value after the sale. 

@Shanel Dial

How much is the estimate for the foundation work? If everything goes exactly as planned how much are you going to walk away from this deal with? What if it costs an additional 10%-20% to get the work done? Do the margins still pencil out after paying capital gains tax?

My other concern besides taking on such a large project is that right now the market is pulling back. Depending on the reno timeline this could turn into a situation of trying to catch the falling knife. I would proceed with caution; Prices in San Diego have been falling for the last 3 months. The median sales price is down over $70k since May. Make sure to also look at other metrics than PPSF for your comps. September numbers will be published soon and I wouldn't be surprised to see that prices have fallen even further.

Remember that comps are backwards-looking metrics. Check into leading indicators as well. DOM has doubled, % of original price received is down, pending sales down, months supply of inventory has doubled. These numbers don't tell the full story since we are still in a sellers market using the months supply of inventory data and they are being compared to what has been a crazy last 2 years.

I'm still very BULLISH on San Diego real estate long-term. I am providing my clients with all of the data along with my opinion.

TL:DR Short-term flipping right now comes with extra risk, proceed with caution.

@Account Closed

My lender can do 10% down bank statement loans up to $1M. See if you can get a conventional or FHA loan with lower down payment options. If you're looking for something in the $700k-$900k range you should have enough liquid left over to get the ADU going. What are your plans to convert a SFR into a smaller SFR with an ADU? Are you referring to a JADU or are you planning to do a garage conversion?

If you want to find something that you can rent immediately keep an eye out for listings with "hidden" units. Sometimes the listing agent does not specify that the home has a granny flat, ADU, JADU, casita etc. or its not listed correctly as a multiunit.

@Matthew Cervoni

I would check out the restaurants in Little Italy. Mona Lisa for Italian cold cuts. If you're looking for something quick but not fast food The Kebob Shop is pretty good. For fancy Mexican and amazing tacos check out Puesto. If you like fried chicken and chicken sandwiches look into The Crack Shack. I'm a huge fan of Tribute Pizza in North Park. There's also Basic Bar and Pizza which offers more of a coal fired New Haven style pizza. If you're into desserts Extraordinary Desserts is good and very popular.