Home › Forums › Financial Markets/Economics › Investment property…Coastal vs. Escondido
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sdsurfer.
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August 12, 2011 at 2:03 PM #719685August 12, 2011 at 2:24 PM #718507
sdsurfer
Participant[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.
My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.
For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]
Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.
Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.
It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!
August 12, 2011 at 2:24 PM #718598Participant[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.
My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.
For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]
Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.
Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.
It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!
August 12, 2011 at 2:24 PM #719196Participant[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.
My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.
For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]
Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.
Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.
It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!
August 12, 2011 at 2:24 PM #719352Participant[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.
My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.
For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]
Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.
Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.
It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!
August 12, 2011 at 2:24 PM #719715Participant[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.
My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.
For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]
Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.
Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.
It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!
August 12, 2011 at 3:35 PM #718537all
Participant[quote=sdsurfer]It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
[/quote]Unlike Canada or India, where owning a rental is illegal 😉
August 12, 2011 at 3:35 PM #718628Participant[quote=sdsurfer]It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
[/quote]Unlike Canada or India, where owning a rental is illegal 😉
August 12, 2011 at 3:35 PM #719226Participant[quote=sdsurfer]It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
[/quote]Unlike Canada or India, where owning a rental is illegal 😉
August 12, 2011 at 3:35 PM #719382Participant[quote=sdsurfer]It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
[/quote]Unlike Canada or India, where owning a rental is illegal 😉
August 12, 2011 at 3:35 PM #719745Participant[quote=sdsurfer]It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.
[/quote]Unlike Canada or India, where owning a rental is illegal 😉
August 13, 2011 at 7:22 AM #718675clearfund
ParticipantSDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.
I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.
We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.
Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.
Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.
August 13, 2011 at 7:22 AM #718766ParticipantSDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.
I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.
We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.
Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.
Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.
August 13, 2011 at 7:22 AM #719364ParticipantSDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.
I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.
We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.
Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.
Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.
August 13, 2011 at 7:22 AM #719522ParticipantSDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.
I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.
We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.
Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.
Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.
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