Condo Investment–Best area in San Diego with low price and decent rent

[ninaprincess]

I have some money and want to invest in a 1 or 2 BR condo and hope to have positive cashflow after HOA, taxes, and maintenance. Which area in San Diego do you think it is best with low price condos and decent rent price?

I have a friend in Sacramento that just bought a property for $135,000 and renting it out for $1300/month (-$280 HOA) which is very good but I want to invest locally.

[sdrealtor]

If you have cash you can get condos around 120k that rent for 1200 or more and have low hoa fees

[ninaprincess]

I only have $40K cash. Is 30% down acceptable with an investment property?

[sdrealtor]

Yes you can find lower down properties. I was referring to the best deals I see which require cash. 2BR/2BA condos with garages for 120K or less with HOA fees of 150/month or less that should rent for 1200 to 1400/month. Cash on cash returns of 10% or better plus upside in the future based upon inflationary rising rents not pure speculation.

[urbanrealtor]

[quote=sdrealtor]Yes you can find lower down properties. I was referring to the best deals I see which require cash. 2BR/2BA condos with garages for 120K or less with HOA fees of 150/month or less that should rent for 1200 to 1400/month. Cash on cash returns of 10% or better plus upside in the future based upon inflationary rising rents not pure speculation.[/quote]

North Park
3030 Suncrest Drive
92116
Just getting FHA approval so the prices are expected to rise.

[Jazzman]

[quote=sdrealtor]Yes you can find lower down properties. I was referring to the best deals I see which require cash. 2BR/2BA condos with garages for 120K or less with HOA fees of 150/month or less that should rent for 1200 to 1400/month. Cash on cash returns of 10% or better plus upside in the future based upon inflationary rising rents not pure speculation.[/quote]
sd are these older units? What are the neighborhoods like?

[sdrealtor]

Small complexes in urban core south of the 8 usually built in 80’s. There are usually a few owner occupants in each that effectively act like unpaid on site property managers. I prefer smaller complexes as they keep close eye on maintenance and fees stay low? Flipside is tough to finance as they dont maintain enough reserves. Not where many of us would choose to live but drive down the 8 and count the jobs in all those buildings, malls, colleges, stadiums etc. everyone’s gotta live somewhere.

[urbanrealtor]

[quote=sdrealtor]Small complexes in urban core south of the 8 usually built in 80’s. There are usually a few owner occupants in each that effectively act like unpaid on site property managers. I prefer smaller complexes as they keep close eye on maintenance and fees stay low? Flipside is tough to finance as they dont maintain enough reserves. Not where many of us would choose to live but drive down the 8 and count the jobs in all those buildings, malls, colleges, stadiums etc. everyone’s gotta live somewhere.[/quote]

Considering the state of finance right now, I would go with a medium to large complex (over 20 units).
If they can be financed, then there is a greater upside potential (people will pay more if they can borrow more) and active HOA’s tend to keep complexes more desirable for tenants. I pull a lot more rent from larger and professionally run places that I manage.
Also, these places will be far more likely to see a price increase.
The caveat that sdr obliquely refers to (high HOA fees) are a concern. However, a savvy owner can mitigate that through research and advocacy.

[sdrealtor]

And my experience is the opposite. UR is talking about appreciation (i.e. speculation on things like FHA buyers paying more) and I am looking at pure cash flow. In the small complexes you can get a garage and sometimes a full size washer dryer. Give someone their own modest home with a safe place to park and store things (a garage) and in unit full size laundry (no more laundromats or fighting for community dryer, saving quarters etc) and they will stay longer. Charge then just under market rent and why would they leave?

He can have his slightly higher rents and the turnover that goes with it. I’ll take long term stable tenants which are more protiftable as vacancy and repairs/clean up after each tenant turnover are your worst enemy. But then again what do I know?

[outtamojo]

Do 1 bedroom units have less turnover then multi bedroom units? Seems like they would need less repair type maintainance also as they are too small to have a party in/ house small children.

[sdrealtor]

My hypothesis is they would have lower turnover because less people involved. No roomate or boy/girlfriend issues. so far its worked by I have nothing more than my anecdotal experience.

[sdsurfer]

[quote=outtamojo]Do 1 bedroom units have less turnover then multi bedroom units? Seems like they would need less repair type maintainance also as they are too small to have a party in/ house small children.[/quote]
I would think absolutely, but others on the board might have more direct experience.

My thought process is that roommates have disagreements, relationships do end sometimes, etc.

I’ve heard plenty of solid investors mention that if they find a 2 bedroom at a good price they turn 1 bed into an office to attract a person living alone.

[recordsclerk]

I remember a about 3 years ago when this complex was in serious distress. These units were going for 50-60K. These units were renting for $800+ and a lot of people on this board giving advice to stay away. Those original buyers have done great. Within a year the units were selling in for 80K. I think there was 2 small assessments. One assessment was for plumbing. I don’t know if they qualify for FHA now, but I know for sure it didn’t back then. One invester bought 10+ units.

Look at this new listings. There is about 10-20K worth of work done. It depends on how cheap you can get the work done.

http://www.sdlookup.com/MLS-120000683-3532_Meade_Ave_1_San_Diego_CA_92116

[zk]

Anybody have experience renting to the type of demographic you find in that part of Normal Heights? I guess any time you’re renting to the poor, you’re going to have issues. It seems like it could be harrowing enough to not be worth it. But, of course, you’re not going to find stuff at 100x rent that the upper-middle class will be renting. So I’m curious to hear what anyone has been through renting to the working class.

[Author]

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