UTC Condos

[spdrun]

^^^

Crap shoot. You may lose money in 5 years if the market tanks, or if the market shoots up, you may gain money in a year (as people who bought ca. late 2012 did till now).

[joec]

[quote=spdrun]^^^

Crap shoot. You may lose money in 5 years if the market tanks, or if the market shoots up, you may gain money in a year (as people who bought ca. late 2012 did till now).[/quote]

All true…what isn’t though is when you sell, you typically will lose 6% instantly from the realtor’s commissions so outside of what the market does, you’re already down a good 24k.

Bottom line is if you plan to stay for a while, buying isn’t the worst thing in the world if the numbers pencil out since as I’ve said many times before, you (and other people) HAVE to live somewhere…unfortunately…

unlike say buying a car or having cable or a smart phone, etc…

[RoyceKemp]

My advice: Don’t treat the timing of your home purchase like it’s a stock on NASDAQ. Yes, real estate is cyclical. Right now we’re in an uptrend. Are we back at peak levels seen during the bubble years, not even close when adjusted for inflation.

To better answer your question, it really depends on your goals, and your personal situation. How long do you intend to occupy your property? is this a stepping stone to a larger home, or will this become your first investment property?

I own units in both Lucera and Villa Vicenza, two complexes that were converted from apartments to condos during the boom, then suffered big time with foreclosures and are finally on the road to recovery. I cash flow on both those units, so to me, and mind you, one of them I bought in 2005 AT THE PEAK, it doesn’t matter what you pay if you plan to hold a property for a long time, and wait out any market fluctuations.

Another point to consider, when buying a home, there are two things you are shopping, the home itself, and the financing for the home. Most folks only pay attention to home prices, but forget there’s something else to consider, the interest rates charged for financing the home purchase. Right now, we’re still in historically low territory, hovering just below the mid 4s. The impact that a rise in interest rates will have on your buying power if you wait until next year, and say rates are 1% higher, could mean an extra couple hundred a month just to pay for the same home. Right now, you have an opportunity to seize on a really great interest rate that you can lock in for 30 years.

My advice, get in the game as soon as you can (I started while I was in college). Start building equity and lock in today’s low rates for 30 years. Use this home as your first rental when you are ready to move into a larger home in 5 to 10 years.

IMO: Lucera and Venetian are better than Verano.

[Coronita]

[quote=RoyceKemp]My advice: Don’t treat the timing of your home purchase like it’s a stock on NASDAQ. Yes, real estate is cyclical. Right now we’re in an uptrend. Are we back at peak levels seen during the bubble years, not even close when adjusted for inflation.

To better answer your question, it really depends on your goals, and your personal situation. How long do you intend to occupy your property? is this a stepping stone to a larger home, or will this become your first investment property?

I own units in both Lucera and Villa Vicenza, two complexes that were converted from apartments to condos during the boom, then suffered big time with foreclosures and are finally on the road to recovery. I cash flow on both those units, so to me, and mind you, one of them I bought in 2005 AT THE PEAK, it doesn’t matter what you pay if you plan to hold a property for a long time, and wait out any market fluctuations.

Another point to consider, when buying a home, there are two things you are shopping, the home itself, and the financing for the home. Most folks only pay attention to home prices, but forget there’s something else to consider, the interest rates charged for financing the home purchase. Right now, we’re still in historically low territory, hovering just below the mid 4s. The impact that a rise in interest rates will have on your buying power if you wait until next year, and say rates are 1% higher, could mean an extra couple hundred a month just to pay for the same home. Right now, you have an opportunity to seize on a really great interest rate that you can lock in for 30 years.

My advice, get in the game as soon as you can (I started while I was in college). Start building equity and lock in today’s low rates for 30 years. Use this home as your first rental when you are ready to move into a larger home in 5 to 10 years.

IMO: Lucera and Venetian are better than Verano.[/quote]

How can you cash flow something at peak?

[RoyceKemp]

I remodeled it with very high end fixtures and now rent it out as a furnished high end rental. So comparable market rent for the unit would be $1400/mo, but because of what I did to the property I get almost $2K/month on average (accounting for vacancy period). I cash flow about $300/month. It helps I put 20% down, and that I am on an ARM, so my interest rate is less than 3% right now, buy my principal balance reduces by $500 each month. With the extra cash flow I pay down the principal by another few K each year, so when rates climb again, I should still be in a cash flow position.

My best buy: In 2012 I bought a 2br condo in San Marcos for $115K. I cash flow on that unit $300/month right out the gate. it’s on a 3.99% loan for 30 years. Comps are going for $160K today.

I’m a buy and hold type of investor, so I focus on long term profitability. I’m okay with market fluctuations and focus on how to maximize returns with what I have, and the best way to do that is get and keep great tenants.

[Coronita]

[quote=livinincali][quote=FlyerInHi]Where is almost as good for $100k less for a 1 bedroom?[/quote]

I don’t love it but how much different is Mira Mesa vs UTC?[/quote]

About $80-100k I think.

[Coronita]

[quote=RoyceKemp]I remodeled it with very high end fixtures and now rent it out as a furnished high end rental. So comparable market rent for the unit would be $1400/mo, but because of what I did to the property I get almost $2K/month on average (accounting for vacancy period). I cash flow about $300/month. It helps I put 20% down, and that I am on an ARM, so my interest rate is less than 3% right now, buy my principal balance reduces by $500 each month. With the extra cash flow I pay down the principal by another few K each year, so when rates climb again, I should still be in a cash flow position.

My best buy: In 2012 I bought a 2br condo in San Marcos for $115K. I cash flow on that unit $300/month right out the gate. it’s on a 3.99% loan for 30 years. Comps are going for $160K today.

I’m a buy and hold type of investor, so I focus on long term profitability. I’m okay with market fluctuations and focus on how to maximize returns with what I have, and the best way to do that is get and keep great tenants.[/quote]

Not to poke and prod but I’m just curious.

Regarding the UTC rental. You mention it’s a completely furnished condo. What is your typical clientele and roughly what is your tenant’s lease duration? And what is your vacancy rate looking like. From the sounds of if, it appears to be a a short(er )term rental..So I was just curious about it… Do you pick your own tenant or do you have someone that you work with that, for instance, does corporate reloc for you? Just trying to learn what others are doing….

Also ,regarding your San Marcos condo.. Sounds like it cash flows pretty darn good… Is it more of a longer term lease? Also, how did you manage to get a 3.99% 30 year fixed rate loan an rental? The best I was able to do was around 4.25% with almost no cost..When the loan balance is less than $150k, most lenders I talked to didn’t even want to do the loan since it was too small, and there was about a 1/2% penalty for being both a small loan and a rental property, if I recall. Again just curious..

Rates have gone up a bit, and I think the best that I’m getting quoted is around 4.4% with about $800 cost for around $100k loan. The best rate so far ends up being my HELOC at around 3%…

Just curious how it appears you manage to do things that other people say can’t be done…

Thanks for sharing…

[RoyceKemp]

No problem, I love talking Real Estate.

I manage my own properties, except one in Oregon. I started out as a Computer Engineer and first buying real estate when I was in college. A few years ago I decided to get my Broker’s license and this year I plan to open a brokerage here in UTC that offers both Sales and Property Management.

So the typical clientele has been people in transition. I had a guy from Seattle move down because his company imports foods from Mexico and they bought a warehouse here in SD. He wanted to be closer to operations, and his daughter lives here. He wasn’t prepared to move all his stuff down since he was wrapping up a divorce, he stayed with me for 15 months.

Another couple stayed with me for 7 months, they work from home 6 months of the year, then travel. They literally just took off to go travel Europe. He said I might here from him again in six months. They sold all their furnishings when they decided on this lifestyle a few years back.

We aim for longer term, but obviously we want 100% occupancy so we’ll accept shorter terms.

Outside of the one furnished rental in UTC, I only do 12-month leases. That unit was a score, I already owned another unit in that complex so I was very familiar with it when that unit came up, I jumped on it. I also know that the HOA dues which are astoundingly high at $375/mon will come down to $200/month in about 2 years, so there will be a nice bump come that time frame (HOA was poorly managed in years past so we’re having to rebuild reserves).

The 3.99% was from a Credit Union in Ohio I found by shopping on the Internet. The timing was just perfect when it came to rock-bottom rates, as I had been searching for months for a property to pick up. I may have paid points, I can’t recall. I know I would have asked about the points and run the numbers to see if it was worth it, I’m a buy and hold investor.

Rates have gone up from the exceptional lows, but they are still LOW historically speaking. It wasn’t until 2009 that we ever dropped below 5%, EVER!

[Coronita]

[quote=RoyceKemp]No problem, I love talking Real Estate.

I manage my own properties, except one in Oregon. I started out as a Computer Engineer and first buying real estate when I was in college. A few years ago I decided to get my Broker’s license and this year I plan to open a brokerage here in UTC that offers both Sales and Property Management.

So the typical clientele has been people in transition. I had a guy from Seattle move down because his company imports foods from Mexico and they bought a warehouse here in SD. He wanted to be closer to operations, and his daughter lives here. He wasn’t prepared to move all his stuff down since he was wrapping up a divorce, he stayed with me for 15 months.

Another couple stayed with me for 7 months, they work from home 6 months of the year, then travel. They literally just took off to go travel Europe. He said I might here from him again in six months. They sold all their furnishings when they decided on this lifestyle a few years back.

We aim for longer term, but obviously we want 100% occupancy so we’ll accept shorter terms.

Outside of the one furnished rental in UTC, I only do 12-month leases. That unit was a score, I already owned another unit in that complex so I was very familiar with it when that unit came up, I jumped on it. I also know that the HOA dues which are astoundingly high at $375/mon will come down to $200/month in about 2 years, so there will be a nice bump come that time frame (HOA was poorly managed in years past so we’re having to rebuild reserves).

The 3.99% was from a Credit Union in Ohio I found by shopping on the Internet. The timing was just perfect when it came to rock-bottom rates, as I had been searching for months for a property to pick up. I may have paid points, I can’t recall. I know I would have asked about the points and run the numbers to see if it was worth it, I’m a buy and hold investor.

Rates have gone up from the exceptional lows, but they are still LOW historically speaking. It wasn’t until 2009 that we ever dropped below 5%, EVER![/quote]

Thanks for sharing. Just curious. the UTC condo, is it a 2/2 or 1/1 that you’re getting $2k/month fully furnished on a 6-8 month lease roughly…

[RoyceKemp]

1/1

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