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October 10, 2013 at 9:58 PM #766686October 10, 2013 at 10:09 PM #766687
bearishgurl
Participant[quote=FlyerInHi]BTW, here is the competition on the same street. Not quite the competition because it’s brand new.
High $300 for a 1000sf 1-bedroom.
http://www.pardeehomes.com/sorrento-valley/sorrento-ridgeYou might not like it, but other people are paying cash in many cases.
I’m not saying that it’s a good buy. I’m just looking at available inventory in SD for that price point.
Personally, I’ve given up buying in SD and I’ve been looking elsewhere beginning 2 years ago.
I think that for those who were smart enough to buy at the bottom in Mira Mesa, 20 years from now, they’ll look smart. Qualcomm and the tech businesses are changing the demographics (like what happened in San Jose).[/quote]
LOL, Flyer, are the developers in MM still using the “no-wall technique” up there?? (inside joke) :=]
At least most of those small houses in NP have pocket doors or French doors to close off the dining room from the living room.
Here, you have the kitchen, LR and DR all opened up into ONE ROOM! Just one big, happy family :=0
***
You’re right. Not only do I not like it but it’s ridiculously overpriced for what you get.
October 10, 2013 at 11:07 PM #766693FlyerInHi
GuestOk, BG, thanks for the links. I’ll have to check out Chula Vista one of these days when I have time. I personally wouldn’t live in those houses… but that’s just me.
I also think the quality of the tenants is different down there. I know the color of money is always green, but I don’t want the tenants calling me to tell me work is slow, or their kids need braces, or their car needs repairs, so they’ll pay me late.
Another teeny weeny point… those houses are in Chula Vista, not in San Diego.
I don’t like families because kids are destructive. When I think families, I imagine storage racks over the toilet, toys, and all kinds of junk all over, and ruined flooring, especially at the low-end of the market.
In SD, my dream tenants for a 2-bedroom would be 2 post-doctorates, or 1 post-doc and 1 engineer, sharing the unit. They work all day, have the unit very sparsely furnished and only seldom cook. They are there for 2 or 3 years until they move on.
But to each his own. I’m sure that it takes all kinds to create a diverse housing market.
BTW, the open floor plan is in. Nobody wants the dinning room closed off by itself, except you. When I remodeled my condo I took down a wall so my kitchen, dining and living areas are all one big room.
October 10, 2013 at 11:24 PM #766695exsdgal
Participant[quote=bearishgurl]
The MM condo (suggested earlier) not only is narrow enough to emulate a train car inside (notice the sorry a$$ kitchen so narrow that if the oven is open, one can’t stand in front of the sink or open the frig??), it has ~$235 in monthly HOA dues (subject to hikes and also special assessments). [/quote]
Ouch! I would not say that bearishgirl. I have many memories from living in condos even smaller than this, but don’t recall thinking about the space limitations of the flat. As for the HOA fees they can be a useful tool. Have you noticed even non-HOA properties are subject to hikes and special assessments? I got a chuckle reading the latest property tax bill…. on top of the 1% property value tax, there were additional charges for $600 (and now I am not talking about MR fees). What is the girl got to do? Start a protest? 🙂
Any case I digress, the OP is in a unique position with the ability to make an all cash purchase. There are opportunities through out San Diego county that can meet one’s investment objectives. Like the saying goes, “value is in the eye of the beholder”. Knowledge is power, and imo real-estate money is made by understanding the dynamics of the property’s location. With everything being equal, what core attribute does the property have to make it stand out. That typically gives way to your revenue source.
Without guidance from the OP I don’t see a reason to hash the different san diego regions. For me the best place is my current hole in the wall 😛
Happy investing!
October 11, 2013 at 12:05 AM #766698Participant@Jazzman, thanks you brought up some good points. In my original post I should have clarified the 20% expense ratio was for a self managed property with no loans.
Also in San Diego it is difficult to find move-in ready properties in sub-400K range. In the hypothetical scenario, the preemptive repairs/remodel is meant to eliminate maintenance concerns for the next 20+ years(?).
October 11, 2013 at 6:04 AM #766699
CoronitaParticipant[quote=AN][quote=bearishgurl]The MM condo (suggested earlier) not only is narrow enough to emulate a train car inside (notice the sorry a$$ kitchen so narrow that if the oven is open, one can’t stand in front of the sink or open the frig??), it has ~$235 in monthly HOA dues (subject to hikes and also special assessments). Having lived in Pt Loma for an unspecified amount of time, Eve may be completely unfamiliar with the type of tenant who would be attracted to that small condo in (congested) MM or at the speed which it will turn over annually.[/quote]
Sorry but you have no idea what you’re talking about. You’re masquerading opinion as fact.[/quote]
——————————-To OP, it really depends on your own comfort level and what sort of tenant pools you want to deal with and to what extent you want to deal with the PITA factor.
I have a friend and she has approximately 8-10 SFH rentals she bought over the course of 2 years in escondido that cash flows really well, and she’s made a killing.. But she even admits, she would never want to deal with the tenants there herself, let alone live there, and she wished she had paid more attention to MM and RB when things were priced “cheap”….I have another friend that does something similar and doesn’t mind it at all and does well too.
in my case, I’m lazy and consider 25+minutes back and forth between north county and say college area about the limit of my PITA I can tolerate, especially when I also need to be around my customers in north county all the time and also have a family, and volunteer at my kids school, and volunteer for some social causes (like making sure Alex Lien gets justice), and also still have enough seat time in my Miata at autox so I can be “less suck” than I currently am, oh and juggle in bi-weekly medical treatments too.
———————
Here’s a rough comparison…In MM, 1/1 condos renting out for about $1250-1300/month on 1 year lease terms. And $1400+/month on something shorter than 1 year. Tenant pool is typically tech workers, some on H1B which have excellent credit, always pay on time, and never give you any problems unless something really does break.. And occupancy about 90+% of the time, since most of these new tech workers aren’t going to be buying for the next 2-4 years…Also, as an added bonus appreciation in MM has been surprisingly ridiculous. Same condo that went for $140kish in 2011 closed recently @$190kish for example, which is roughly the price of a 2/2 in MM 2 years ago…
Meanwhile approximately similarly priced 2/2 in “college area” costed about the same, and rents for maybe $100/month more. But clearly with slightly more PITA factor than MM, due to the more fluid nature of tenant pool there and noticeably less stellar quality tenant pool (you’re not going to find you $80k+ qualcomm entry-level tech worker that won’t be moving for 2-5 years down there most of the time). And there is considerably more supply of rental property there…. Cash flow yes, but still waiting for any likewise appreciation that has already happened in MM…Thankfully, good property manager there makes it worthwhile (need a recommendation, PM me)..
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There’s really no right or wrong way of doing it…As long as you’re making money and beating what you could do elsewhere with the same money…Better imho then not doing anything at all. At an point in time…if you’re not making money, you’re spending it, or letting someone else spend it for you..
October 11, 2013 at 11:16 AM #766703an
Participant[quote=bearishgurl]I looked on the map and Calle Cristobal in this area appears to be part of the portion which was annexed to MM in recent years. I also noticed that the neither of the listings (sale and rental) for both of your suggestions (in the same complex?) have garages. The rental listing states two parking spaces (uncovered?). $1800 month is a LOT TO PAY to live in a traincar apt. I’m curious what the average length of tenancy is there at that rental price point.[/quote]Seriously BG, you should stop spouting opinion as fact. Mira Mesa did not annex Calle Cristobal. Mira Mesa community since its inception has the boundary of 805 to the West, 15 to the East, Lopez Canyon to the North, and Miramar to the South. You can do your own research if you don’t believe me. BTW, looking on the map is not research.
BTW, what’s the point of bringing up the fact that a condo doesn’t have garage? Majority of the condos out there doesn’t have a garage. What’s your point? Some people rather to live in a traincar near work than in a house in the boonies far away from work.
October 11, 2013 at 12:00 PM #766705Participantflu states that, realistically, current rents for a 1/1 in MM are $1250 to $1400 mo. FIH states that his pie-in-the-sky rent for a 1/1 in MM is $1800. I would say that if he COULD get someone to pay that in MM for a 1/1 (esp w/no carport or garage), then they would likely move out in 6-9 mos as soon as they found a better deal.
There’s a LOT of difference between those two rental price points.
And exsdgal, the extra $600 showing on your tax bill is due to charges for local services in your area as well as any voter-approved bonds. These SAME charges are ALSO present on condo-owners’ tax bills in your immediate area over and above any HOA dues they have to pay. Every property owner in a given micro area pays the same on these charges regardless of the square footage of their dwelling or whether or not they actually “own” any land or just a fractional interest of a building.
And flu, in the “college area,” YOU, as a LL, can get 9-10 months of UP-FRONT rent from each student’s (out-of-county/state) parent(s) whom you rent to PRIOR to the beginning of the fall semester (August). This also applies to condos around USD and UCSD. I’ve seen this done time and time again with agents whom I worked with who bought condos for their kids to live in while attending college. The parents of these students expect this because that is how an on-campus dorm is paid for. It is typical to include all utilities in the rent and for each student to have their own bdrm (and poss share a bath w/one other student-tenant). This is MUCH better and more economical than a dorm because the students have more privacy and can prepare their own meals while home instead of paying $375 – $500 mo for a “meal ticket” which they are not always present on campus to use regularly. A “college-area” house or condo is often a really good investment but requires a bit more mgmt than renting to a non-student household.
Those houses in Chula Vista which I posted links to do NOT generally attract lesser-qualified tenants than other those in other areas of in the county. A landlord will get tenant applicants who can’t manage their incomes in ALL zip codes … that is, even those tenants who passed muster upon application will choose their iphone bill, cable bill, car payment, kid’s braces, etc over paying timely rent one or more months when push comes to shove. Just because a tenant may be single and a “condo dweller” in no way implies that they aren’t a parent who has obligations to their child(ren) or aren’t a spendthrift.
Tenants who successfully secured a rental house to live close to relatives for childcare purposes have a high motivation to keep that house … and … in any case, they have well-established relatives nearby to possibly help them out financially if they get into a jam. This is just something to keep in mind.
I’m not advocating that Eve shop in Chula Vista (which is much closer to SD 92101 than MM is, btw). I’m just saying that there are “bread-and-butter” rental houses all over the county available NOW in her price range which do not have MR/HOA and, unlike those MM condo examples, have ample off-street pkg and/or a garage available. However, most of them DO attract applicants with families.
[quote=AN]I like Mira Mesa, Racho Bernardo, Rancho Penasquitos. Basically places that are near high tech hub of Sorrento Valley and Rancho Bernardo.[/quote]
AN, you may already be aware that the PQ/RB area that you prefer so much to invest in has hundreds and possibly well over 1000 households in residence which are using Section 8 vouchers for the bulk of their rent. There are many LL’s in 92128/92129 who accept Section 8, and PQ, in particular is FULL of low-income families (92128 has more low-income, often disabled singles). To a lesser extent, the same is true of MM.
[quote=FlyerInHi]…In SD, my dream tenants for a 2-bedroom would be 2 post-doctorates, or 1 post-doc and 1 engineer, sharing the unit. They work all day, have the unit very sparsely furnished and only seldom cook. They are there for 2 or 3 years until they move on…[/quote]
Again, I have to laugh at FIH’s “dream tenants,” one of whom he states here is a “postdoc” (couple?). My questions for him here are as follows:
“What is this theoretical postdoc couple’s actual monthly income?”
“If they’re so intelligent, why would they pay $1800 mo rent for a $1350-$1400 mo (traincar) condo?”
“Do they have any kid(s)?”
“Have you noticed upon move-out if your tenants used the stove … or not?”
“Do you, FIH, actually have current tenants who are a `postdoc couple?'” If so, for how long and what is the monthly rent they’re paying? If not, what are the actual occupations of your current tenant(s)?
And lastly,
Are any of the adults living in your rental(s) currently unemployed or working as a (gasp!) hairdresser or waitress?
I was just wondering and also trying to inject a bit of “realism” to this thread :=D
October 11, 2013 at 12:14 PM #766706Participant[quote=bearishgurl]AN, you may already be aware that the PQ/RB area that you prefer so much to invest in has hundreds and possibly well over 1000 households in residence which are using Section 8 vouchers for the bulk of their rent. There are many LL’s in 92128/92129 who accept Section 8, and PQ, in particular is FULL of low-income families (92128 has more low-income, often disabled singles). To a lesser extent, the same is true of MM. [/quote]What’s your point? Are you trying to say those are the only tenants looking in those areas?
October 11, 2013 at 12:17 PM #766707Participant[quote=AN][quote=bearishgurl]I looked on the map and Calle Cristobal in this area appears to be part of the portion which was annexed to MM in recent years. I also noticed that the neither of the listings (sale and rental) for both of your suggestions (in the same complex?) have garages. The rental listing states two parking spaces (uncovered?). $1800 month is a LOT TO PAY to live in a traincar apt. I’m curious what the average length of tenancy is there at that rental price point.[/quote]Seriously BG, you should stop spouting opinion as fact. Mira Mesa did not annex Calle Cristobal. Mira Mesa community since its inception has the boundary of 805 to the West, 15 to the East, Lopez Canyon to the North, and Miramar to the South. You can do your own research if you don’t believe me. BTW, looking on the map is not research.
BTW, what’s the point of bringing up the fact that a condo doesn’t have garage? Majority of the condos out there doesn’t have a garage. What’s your point? Some people rather to live in a traincar near work than in a house in the boonies far away from work.[/quote]
I digress. There was little or nothing built on the land from I-805 to the west, which was part of MM, until the last few years. The area IS part of the City (MM) but has only recently been developed.
Here in South County, the vast majority of condos have at least a std one-car garage and most have a two-car garage. I guess that’s the difference in congestion levels due to zoning differences between MM and Chula Vista (and surrounds). Garages and storage space (which they would have to pay dearly for at a self-storage biz) are very important to tenants. Especially if they have a pricey vehicle which could easily get hit, scratched or vandalized while parked in a condo parking lot.
Although some seem to do it, I agree that South County is too far for most workers to drive RT daily to Sorrento Valley/Mesa to work. That is the ONLY REASON why Chula V’s asking prices for starter SFRs seem to be lower than those in other, closer areas to major job centers. They are NOT lesser houses, lesser neighborhoods or somehow have lesser-intelligent or poorer residents living there than do rentals in other parts of the county. When one looks at the price of mid-level, executive and luxury housing in South County, most of it is every bit as expensive as that in other parts of the county. This is because this type of housing isn’t usually used as a rental.
October 11, 2013 at 12:24 PM #766708Participant[quote=AN][quote=bearishgurl]AN, you may already be aware that the PQ/RB area that you prefer so much to invest in has hundreds and possibly well over 1000 households in residence which are using Section 8 vouchers for the bulk of their rent. There are many LL’s in 92128/92129 who accept Section 8, and PQ, in particular is FULL of low-income families (92128 has more low-income, often disabled singles). To a lesser extent, the same is true of MM. [/quote]What’s your point? Are you trying to say those are the only tenants looking in those areas?[/quote]
No, FIH has stated here in so many words that he “suspects” tenant-applicants in South County to somehow be “lesser-qualified” than the tenants he is used to dealing with (up north?).
I’m just putting this ridiculous assumption to rest as nothing could be further from the truth.
[quote=FlyerInHi]Ok, BG, thanks for the links. I’ll have to check out Chula Vista one of these days when I have time. I personally wouldn’t live in those houses… but that’s just me.
I also think the quality of the tenants is different down there. I know the color of money is always green, but I don’t want the tenants calling me to tell me work is slow, or their kids need braces, or their car needs repairs, so they’ll pay me late.
Another teeny weeny point… those houses are in Chula Vista, not in San Diego. ..[/quote]
October 11, 2013 at 12:25 PM #766709Jazzman
Participant[quote=spdrun]
Expect to pay up to 50% of income on expenses (property manager, maintenance, insurance, HOAs, vacancy, lease fee, advertising, some utilities, property tax).
Condo doesn’t need a property manager and if you pick the right one, maintenance is minimal. Insurance is mostly picked up by the HOA fee, landlord’s liability is cheap. What lease fee? What advertising? Craigslist is free, and I’ve never checked a tenant’s credit, just interviewed VERRRRRY carefully, asked for multiple references, checked them out online, and looked if the story made sense.[/quote]
The OP is not from the US. Would you dive into an RE investment in a foreign country? You need to understand eviction laws, how to deal with late payments, tenant and landlord rights and responsibilities, rent controls, liability issues, maintenance regulations (lead paint, asbestos and mold), background checks, credit checks, lease contracts, references, interviewing techniques. You need 24 hour contractors that you trust. It is time consuming, full of potential problems that can very quickly turn into a train wreck. A good property manager will do all this for you, and the costs I mention are relating to a managed property. You may be charged up to one months rent for a new lease.
Owning a condo is no different other than exterior maintenance and basic building insurance. You are, however, paying for that in HOA fees. You WILL need liability insurance.
There are a lot of part-time investors who have just one home they inherited or bought many years ago in their own backyard, where they know everyone and have had the same reliable tenant for years. The other side of RE investing can be very different. If you do your research, always expect the unexpected and prepare for the worst you’ll probably be OK. Rule one for me is always over-estimate the costs and I know many investors who use the 50% rule. That is conservative in my experience. Because it hasn’t happened to you doesn’t mean that it won’t happen, or happen to someone else.
October 11, 2013 at 1:13 PM #766711Participant[quote=bearishgurl]No, FIH has stated here in so many words that he “suspects” tenant-applicants in South County to somehow be “lesser-qualified” than the tenants he is used to dealing with (up north?).
I’m just putting this ridiculous assumption to rest as nothing could be further from the truth.
[/quote]You’re responding to me about a point that I didn’t make? I don’t care how many section 8 there area. I do care who are the majority renters.October 11, 2013 at 1:25 PM #766712Participant[quote=bearishgurl]I digress. There was little or nothing built on the land from I-805 to the west, which was part of MM, until the last few years. The area IS part of the City (MM) but has only recently been developed.[/quote]Seriously BG, do some research before you speak. The 92121 part of Mira Mesa has been built out for 15 years. Is 15 years now the new “last few years”? Most of Calle Cristobal was built over 20 years ago.
[quote=bearishgurl]Here in South County, the vast majority of condos have at least a std one-car garage and most have a two-car garage. I guess that’s the difference in congestion levels due to zoning differences between MM and Chula Vista (and surrounds). Garages and storage space (which they would have to pay dearly for at a self-storage biz) are very important to tenants. Especially if they have a pricey vehicle which could easily get hit, scratched or vandalized while parked in a condo parking lot.[/quote]
What you’re describing in South County is the exactly reason why there are a demographic difference between the area. What’s important to those who live in South County doesn’t necessary be what’s important to those who live in Mira Mesa. You can’t take your South County view point and apply to other areas.[quote=bearishgurl]Although some seem to do it, I agree that South County is too far for most workers to drive RT daily to Sorrento Valley/Mesa to work. That is the ONLY REASON why Chula V’s asking prices for starter SFRs seem to be lower than those in other, closer areas to major job centers. They are NOT lesser houses, lesser neighborhoods or somehow have lesser-intelligent or poorer residents living there than do rentals in other parts of the county. When one looks at the price of mid-level, executive and luxury housing in South County, most of it is every bit as expensive as that in other parts of the county. This is because this type of housing isn’t usually used as a rental.[/quote]I hope you know that you’re contradicting yourself in this paragraph. The distance IS one of the reason why the demographics are different. Because the demographic is different, the rest kinda explain itself. If you prefer to rent to professionals, either fresh grads or H1B working at Qualcomm, then you wouldn’t be buying in Chula Vista. You’ll be buying where they want to live, which is Mira Mesa. The demographic is the way it is. Deal with it. We’re talking about $400k rentals here, not some mansions. Those who rent a $400k rental are not the same type of people who buy executive & luxury housing in South County.
October 11, 2013 at 1:36 PM #766714CoronitaParticipant[quote]
flu states that, realistically, current rents for a 1/1 in MM are $1250 to $1400 mo. FIH states that his pie-in-the-sky rent for a 1/1 in MM is $1800. I would say that if he COULD get someone to pay that in MM for a 1/1 (esp w/no carport or garage), then they would likely move out in 6-9 mos as soon as they found a better deal.
There’s a LOT of difference between those two rental price points.
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