All Forum Posts by: Maxwell Ventura

@Stelios Andong

You won't able to go FHA on a 3-4 unit because of the self-sufficiency rule.

Negative cash flow is expected in the beginning. I'd double check w/ a local lender about PMI. $900 may be a bit high.

3/2s will be considerably tougher to find than 2/2s and 2/1s. 

When factoring in principal pay down & tax savings (along w/ CF & Appr) your returns should start looking pretty good after only a couple years. From then on out count on compounding interest to accelerate your gains. 

For critiera: Look for a duplex w/ value add opportunities on the lot. Renovations, some sort of ADU play, and leveraging non optimized zoning, alley access. etc..

@Franklin P.

Congrats on your BRRRR back east. I'm originally from Philadelphia. Came out to SD 6 years ago.

Curious to hear more about your project and where you invested out in NY? Consider me an open book & resource out for out here in SD. 

Thanks

@Will R.

$100K in 6 months is pretty amazing. The market out here has skyrocketed since May/June of last year. Lots of reasons why and lots of reasons why it should continue in that direction. 

Ask yourself what's more important to you; Short term higher cash flow/cap rate property? Or long term play that will grow exponentially via compound interest? SD was voted most competitive market last year and also voted the #1 market to expect appreciation in 2021 at 8.3% (Core Logic). 

With that being said, if you guys are trying to accumulate assets faster and don't have a large sum for a down payment on an actual "investment property" then maybe SD isn't the way to go. All depends. There are many good STR investment plays in SoCal too. Joshua Tree, Palm Springs, Idlewild, Big Bear, etc..

If you want best return on your money you'll want to look at an owner occupied low money down play in a heavy appreciating market (SD #1 right now)

Hope that helps

@Kae M.

Understood. $850K will certainly get you a little further down here. There is opportunity in that range.

@Li Lu 

Yes rents will continue to increase along the same trajectory of an appreciating market. The main exception to this right now (and possibly into the near future) is downtown. Inventory is a bit healthier in 92101 and the condo/townhomes are competing w/ the numerous highrise apartments for rent. 

Since CoVID, rents have actually dropped slightly downtown, but not by much. Mainly due to overall higher supply. I suspect (with my crystal ball), rents will continue to increase after CoVID settles down and people start to migrate back downtown again. SD County inventory overall is scarce, and there are numerous downtown development projects ongoing and slated over the next 5 years, brining in a lot of high paying careers. 

Hope this helps!

@Kae M.

That's the idea! Your rent payment is 100% interest! 

A live in house hack with little money down will give you the best return on your money. Doing so in a duplex OR SFR w/ a value ad play is a great option here in San Diego right now w/ the current state of the market. Taking advantage of one of SD's best qualities -> Appreciation and a much higher return on your initial investment when coming in w/ little $ down.

In regards to location, there's a much larger portion of small multifamily properties all throughout the metro area and South Bay. Oceanside, Carlsbad and Vista are also areas with opportunity in North County.

You have the ability to leverage yourself in a very favorable position w/ low money out of pocket and have a portion of mortgage paid by a tenant(s) while your home continues to appreciate. Not only that, value add's are a hot commodity here and it's easier to force appreciation than most places. 

Lastly, I would encourage you not to put too much emphasis on cash flowing as soon as you move out. The few hundred dollars in cash flow will be insignificant to the growth of your return via SD's stellar appreciation. SD actually has great rental cash flow, just not INITIAL cash flow. 

Avg annual rent increases are between 3-4% and an increasing rental market will follow along the same trajectory as an appreciating market.
This is much better grasped on a spreadsheet when looking at total return (cash flow, appreciation, tax savings, principal paydown) over time. 

Hope this helps.

@Li Lu

You're on the right track. To get the best return on your money I'd suggest going the house hacking route. 

Housing hacking w/ little to no money down in a duplex OR SFR w/ a value ad play is a great option here in San Diego right now w/ the current state of the market. Taking advantage of one of SD's best qualities -> Appreciation and a much higher return on your initial investment when coming in w/ little $ down.

In regards to location, there's a much larger portion of small multifamily properties all throughout the metro area and South Bay. Oceanside, Carlsbad and Vista are also areas with opportunity in North County.

You have the ability to leverage yourself in a very favorable position w/ low money out of pocket and have a portion of mortgage paid by a tenant(s) while your home continues to appreciate. Not only that, value add's are a hot commodity here and it's easier to force appreciation than most places. 

Lastly, I would encourage you not to put too much emphasis on cash flowing as soon as you move out. The few hundred dollars in cash flow will be insignificant to the growth of your return via SD's stellar appreciation. SD actually has great rental cash flow, just not INITIAL cash flow. Avg annual rent increases are between 3-4% and an increasing rental market will follow along the same trajectory as an appreciating market. 

This is much better grasped on a spreadsheet when looking at total return (cash flow, appreciation, tax savings, principal paydown) over time. 

Hope this helps.

@Kae M.

Hi, it really comes back to your goals. Are you looking for more cash flow up front for future value ads and projects? Or looking to park your money into something for a while that will end up growing in value at a faster rate via appreciation. 

Looking to live in? or Pure investment. 

Happy to help. Thanks

@Stephan Ketterer

Many reasons to invest in SD: 

• Median sales price increase year over year approximately 10%
• Months supply of inventory down to 1.2 (lowest we've ever had). 
• Very low supply to high demand. 
• SD increases in rent 3-4% a year. An increasing rental market will generally follow a similar trend line w/ an appreciating market. Know that cash flow is actually quite good here, just not INITIAL cash flow generally. 
• Tech Boom is happening now here in SD. Prices started to skyrocket around June when Bay area, Boston, & NY tech related careers started to work remote and came here. 
• Inventory shouldn't change much over the foreseeable future. Running out of room to build and new construction isn't keeping up w/ demand.
• Recommendation is start w/ a 2-4 unit w/ a value add play. Majority of opportunity is in Metro SD, National City, Chula Vista and Oceanside / Carlsbad / Vista up in North County. 

Your total return will should great on a spreadsheet when factoring in compounding interest from appreciation over time, along w/ cashflow, prinicipal paydown, & tax savings.

@Derrick Lloyd

You put money invested $11,879. How did you pay for the rehab costs? Out of pocket? Or all taken out of your HELOC?