Another I want to buy a condo, then rent it out thread.

[saiine]

All,

I’m as close as I’ve come to buying my first property and am trying to do my homework that fits in line with my goal.

Goal being, I want to live in this unit for up to 5 years at which point I would hope to upgrade and keep it as a rental, hopefully being cash flow positive on it.

Areas I have been focused on: PQ, RB, CV, Tierassanta, MM. I work in Kearny Mesa, so anywhere in the radius of 15-20 minutes commute is preferred.
I’ve picked a few scenarios, two in PQ and one in CV. My hope is that you all can offer some advice on my thought process.

The assumptions for the scenarios below is that the loan is VA with 0 down. Mortgage is considering everything (hoa, taxes, insurance) and the rate is 4.9%

I’ve actually found units in the complexes below for rent on CL, which is where I got my rent prices.

1. 2/2 in PQ for 200,900. Mortgage: 1551.45. These rent for 1250, so I’m -301 to cash flow.

2. 3/2 in PQ for 240,000. Mortgage: 1787.74. These rent for 1450, so I’m -337 to cash flow.

3. 2/2 in CV for 299,000. Mortgage: 2158. These rent for 1650, so I’m -508 to cash flow.

At first glance to me, the uneducated beginner, the 2/2 in PQ seems like it would turn positive first. However, I do know that CV is a nicer place to live and the actual appreciation of the property might make up for it in the end.

I don’t have a specific question. I’m looking more for guidance, things to consider other than just these numbers perhaps from people who have been there and done that.

Appreciate your help!

[SD Realtor]

Just do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.

As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.

With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.

[SD Realtor]

Just do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.

As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.

With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.

[SD Realtor]

Just do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.

As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.

With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.

[SD Realtor]

Just do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.

As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.

With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.

[SD Realtor]

Just do all of your homework with regards to the numbers you use. Also for safety I would depreciate CL rent numbers by 5-10%. What someone asks for on CL and what they get in reality is much different. I would also add in a few weeks per year for vacancy. Also budget a little bit for repairs and such.

As sdr said in another post there are rental opportunities but you have to be patient and look for deals. He mentioned 1 bedrooms. As an anecdote I bought a 1 bedroom in Mission Valley as a rental in 2003 and held it until 2007. I was cash flow nuetral on it +/- 1/2 percent per year. I bought it for like 152 I think and sold for 200k. Could have sold it for much much more if I would have let it go at the peak. However I was blessed with 1 tenant. Had it rented the week after I bought it and that same tenant ended up buying the home. So that was not a cash flow play but a rather fair appreciation play. Also it helped on my taxes each year because of depreciation. I had other stock losses that were used to offset the cap gains on the home so that was nice as well.

With the amount of financing you are throwing down, it will be challenging to get cash flow opportunities no matter what you buy. Personally if something was cash flowing less then 1% for San Diego RE I would not do it but that is just me. If the appreciation is stellar maybe… but the numbers up there you threw out do not make any sense. Also you need a spread sheet that has all of the costs including HOA and other things I mentioned.

[sdrealtor]

FWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.

[sdrealtor]

FWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.

[sdrealtor]

FWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.

[sdrealtor]

FWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.

[sdrealtor]

FWIW the rents in PQ look a little light. I would think 2BR would be clsoer to 1400 and 3BR would be at least 1600.

[saiine]

Thanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.

Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.

Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.

[saiine]

Thanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.

Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.

Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.

[saiine]

Thanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.

Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.

Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.

[saiine]

Thanks SDR. When you said “numbers I use”, what do you mean exactly? I actually have started a spreadsheet, factoring in not only finances, but self scores on things such as parking, walking, area, etc. These are definite contributors to my decision because as I said, I need to live there for several years.

Come day 1, I would like to get a renter in one of the bedrooms to help pay towards the mortgage.

Good point about repairs and vacancy. When you said the numbers didn’t make sense what did you mean exactly? This is what I want to hear, as it will help me get better at this.

[Author]

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