North County Coastal Inventory

[TheBreeze]

Foreclosureradar.com agrees with your assessment, sd:

http://www.foreclosureradar.com/free-foreclosure-search.php?&Location=92024

That site shows only six 4-bedroom, 2500+ sq. ft SFRs in the 92024 zip code that are in various states of foreclosure.

My understanding is that smaller residences were purchased by subprime borrowers. Those mortgages began to reset in earnest in 2006. The bigger residences in more posh areas like Encinitas were purchased by ‘prime’ borrowers using pay option ARMs. Those mortgages begin to reset in earnest this year. Thus, my guess is that we’ll see places like Encinitas start to take a hit later this year. And since these places were purchased using Pay Option ARMs, you’ll see massive mortgages as compared to the value of the associated homes.

A pretty decent article on Pay Option ARMs can be found here:

http://www.toomre.com/Pay_Option_ARM_Worries

This LA Times article suggests that the second tide of the mortgage defaults are about to start. After reviewing data from mortgage industry data trackers, the author concludes that Pay Option ARM borrowers — “most of whom boast respectable and often top-tier credit scores and appear to have substantial incomes and home equity” – are having severe delinquency problems that are tied to the loose lending practices that inundated the sub-prime business. Pay Option ARM loans often were granted on the basis of stated income, not proof of a borrower’s income, giving rise to their nickname, “liar’s loans.”

[TheBreeze]

davelj,

I’m not sure I would feel too comfortable buying a rental in South San Diego. I just read an article describing how illegals are leaving their rentals with no notice and heading back across the border due to the lack of construction work. Additionally, as we head into a recession and more of the vacant pre-foreclosure homes come back on line, I would expect rents to decline. Of course, folks who buy rentals now will be a heckuva lot better off than those who bought ‘investment’ properties two to three years ago.

[TheBreeze]

davelj,

I’m not sure I would feel too comfortable buying a rental in South San Diego. I just read an article describing how illegals are leaving their rentals with no notice and heading back across the border due to the lack of construction work. Additionally, as we head into a recession and more of the vacant pre-foreclosure homes come back on line, I would expect rents to decline. Of course, folks who buy rentals now will be a heckuva lot better off than those who bought ‘investment’ properties two to three years ago.

[TheBreeze]

davelj,

I’m not sure I would feel too comfortable buying a rental in South San Diego. I just read an article describing how illegals are leaving their rentals with no notice and heading back across the border due to the lack of construction work. Additionally, as we head into a recession and more of the vacant pre-foreclosure homes come back on line, I would expect rents to decline. Of course, folks who buy rentals now will be a heckuva lot better off than those who bought ‘investment’ properties two to three years ago.

[TheBreeze]

davelj,

I’m not sure I would feel too comfortable buying a rental in South San Diego. I just read an article describing how illegals are leaving their rentals with no notice and heading back across the border due to the lack of construction work. Additionally, as we head into a recession and more of the vacant pre-foreclosure homes come back on line, I would expect rents to decline. Of course, folks who buy rentals now will be a heckuva lot better off than those who bought ‘investment’ properties two to three years ago.

[TheBreeze]

davelj,

I’m not sure I would feel too comfortable buying a rental in South San Diego. I just read an article describing how illegals are leaving their rentals with no notice and heading back across the border due to the lack of construction work. Additionally, as we head into a recession and more of the vacant pre-foreclosure homes come back on line, I would expect rents to decline. Of course, folks who buy rentals now will be a heckuva lot better off than those who bought ‘investment’ properties two to three years ago.

[davelj]

Breeze,

Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.

sdrealtor,

25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.

[davelj]

Breeze,

Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.

sdrealtor,

25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.

[davelj]

Breeze,

Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.

sdrealtor,

25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.

[davelj]

Breeze,

Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.

sdrealtor,

25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.

[davelj]

Breeze,

Not to worry. I’m not really interested in buying rental units in south San Diego. I only mentioned south San Diego because things are further along the way to making sense there from an investment perspective than other parts of the county. Your observation about Mexicans heading back to Mexico makes sense to me, but a friend of mine is seeing something completely different. He’s a partner in a company that owns two large apartment complexes in Chula Vista (more than 400 units between the two of them). They have zero vacancies and are raising rents 8% as new tenants come in. They’re seeing an overflow from people losing their homes and needing to rent. He thinks rents will eventually flatten out as the REOs get sold to investors but that could be a couple of years off. Anyhow, just an interesting data point.

sdrealtor,

25%-35% of rent for maintenance and vacancies is an industry standard. New paint, carpet, etc. plus vacancies really adds up, especially in a rental where then tenant generally doesn’t care too much. I’m not saying that there aren’t properties worth buying right now as rentals. I’m merely saying that I doubt there’s anything that “truly” cash flows out there after taking into account all of the operating expenses. But we’ll get there. There were plenty of them around in ’96-’98. We’ll see similar relative pricing again.

[maybe]

My guess was that people would dig in and stop trading houses like cars. To date that is what seems to be happening

Patience, my young Jedi, patience.

It will happen, but it will take some time…

[maybe]

My guess was that people would dig in and stop trading houses like cars. To date that is what seems to be happening

Patience, my young Jedi, patience.

It will happen, but it will take some time…

[maybe]

My guess was that people would dig in and stop trading houses like cars. To date that is what seems to be happening

Patience, my young Jedi, patience.

It will happen, but it will take some time…

[maybe]

My guess was that people would dig in and stop trading houses like cars. To date that is what seems to be happening

Patience, my young Jedi, patience.

It will happen, but it will take some time…

[Author]

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