[4plexowner]

Zillow isn’t showing any sales info which may mean that the current owner is the original buyer.

2986 Laning Rd is a 2300 sqft 3 bdrm / 2.5 bath two story box on a 2485 sf lot.

The houses in Liberty Station are so close together you could borrow a cup of sugar from your neighbor by sticking your hand out the kitchen window.

I watched these things being built in 2004 and I was amazed that people were paying $800+K for them.

Even more amazed when they started turning over at $1+ mil.

Not surprising that many of them are currently For Sale.

Remember that these fine homes are just a few blocks from being under the flight path and they also get to enjoy the road noise from Rosecrans / Nimitz / Harbor Blvd along with the Navy jets on North Island.

Not to mention that McMillan had to remediate the hazardous waste at NTC before he started building these homes.

Current listing shows list date of 6/30/06 – yeah, right!

[4plexowner]

A ‘flip’ that ‘flopped’.

I love it!!!

~

I was jogging through Liberty Station this morning (used to be NTC in Pt Loma) and noticed numerous For Sale signs.

I assume that most of these houses were bought by speculators and they are now bailing.

These houses had been selling for as high as $1.3 mil but they aren’t anymore.

I have been watching one in particular that came on the market just under $1.1 mil back in Oct/Nov of 2005. It is still on the market today – asking price is $899K.

Another ‘flopped’ ‘flip’ probably.

[4plexowner]

I believe that the downtown condo market has to be considered when predicting where rents are headed.

Given the existing glut of downtown condos already and the fact that more condos are being built, I expect we will have thousands of rental condos downtown before the market bottoms.

This overhang of rental condos will depress the rental market throughout San Diego.

~

My real estate agent deals mostly with view properties and has rented some of them over the years.

It always blew me away when she talked about renting these places for $4000+/month.

When I asked her what type of person rents at those prices she said that they mostly fall into these categories:
1. lots of cashflow but credit so horrible that they couldn’t buy anything or couldn’t get an acceptable mortgage
2. involved in a divorce or lawsuit where it didn’t make sense to acquire new assets
3. only in San Diego for a limitted time

Based on her experience, I don’t believe there are many people who are willing to rent for $4000+/month – ie, there IS a cap on rents in San Diego.

[4plexowner]

Realize that a condo conversion is just an apartment with a legal deed that allows it to be sold individually.

The converter isn’t going to upgrade electrical, plumbing, insulation, etc.

Why anyone would pay good money to own an apartment that has had a cosmetic makeover boggles my mind.

Save your money. Plan on buying a single-family house in 2009 or 2010. I expect to be buying entry-level houses for less than people are currently paying for condo conversions.

[4plexowner]

Engineers and tech workers might consider steering their careers towards the defense industry with the intention of eventually doing work that requires a security clearance.

Classified jobs aren’t going to be exported anytime soon (I’m not willing to say “ever”).

~

IMO, if we actually end up with a global economy, the average global wage will be about 10 of today’s US dollars per hour.

That will be fantastic for other countries like China where the average wage is currently about 60 US cents per hour with no benefits.

It will be very painful here in the US.

$10/hour is $20,000/year – can you even visualize what your lifestyle might look like on $20K/year?

[4plexowner]

I went from being an employee (software engineer) to working as a contractor about 8 years ago.

Multiplied my income by 2.5x and no longer had to put up with employee bullshit like annual reviews.

[4plexowner]

I converted two four-unit properties to condos.

Sold the first one prior to completion of conversion process because I was running into issues with the city. Buyer completed the process but it took him another 11 months.

Completed the second conversion last year.

City recently changed condo conversion requirements. If I understand correctly, condo conversions will now have to meet the same parking requirements as new construction. Prior to this change, whatever parking a property had was acceptable.

I think this parking change essentially stops condo conversions in the future (very few multi-unit properties have enough parking to meet today’s codes) but doesn’t apply to projects that are already in the pipeline.

There are numerous notices that the converter is supposed to serve on the tenants. The six month notice is one of the first ones.

The converters are hoping that you will move out on your own volition. My advice is to play hardball – don’t be an a-hole about it, but don’t just rollover and move out. You have rights as a tenant. Current rules require the converter to compensate you financially for forcing you to move.

Check this link for tenant info: http://www.tenantslegalcenter.com/html/condo_conversion.html

There are no specs for condo conversions believe it or not.

The conversion process is strictly a legal / paperwork process with the city. Most converters upgrade the property while the paperwork is being processed but this is not required. And the upgrades are all cosmetic – no converter is going to upgrade wiring, plumbing, insulation, etc if they don’t have to. I chose to have insulation blown into the walls and ceilings of my units because I had lived in one of the downstairs units so I knew that noise was an issue.

Personal opinion: condos are the lowest rung of the real estate ladder (OK, mobile homes are one rung down from condos) and condo conversions are on an even lower rung if that is possible – don’t buy condos for the next few years and certainly don’t buy a condo conversion

[4plexowner]

The link given is for a subscriber’s only article.

Remember that InmanNews has a bias – they provide information and services to the real estate industry – they aren’t going to discourage you from investing in real estate.

Let’s see, I can get 5% in a FDIC insured money-market fund or I can get 8-12% by letting someone else invest my money into something that I don’t really understand and they’ll require me to sign something saying it is OK if they lose all of my money (fine print in all financial contracts).

This is a no-brainer for me – the extra return isn’t worth the risk given the current state of the real estate market nationwide.

[4plexowner]

I had a challenge getting my money back from Everbank.

The check that Everbank sent me when I redeemed a CD got lost in the mail.

When it was obvious to me that the check was lost, I started making phone calls.

They gave me two choices before they would cut another check:
1. obtain a surety bond to cover the check(ie, spend 3% of the value of the check in order to obtain the check – like that makes any sense!)
2. wait 6 months

They also chastised me for asking for a check instead of a wire transfer (I’m not kidding!).

I ended my final conversation with them by saying that I was going to start an e-mail campaign notifying all the analysts that recommend them of my experience.

2 minutes later (literally) the representative called me on my cell phone to let me know that a new check was being sent immediately.

~

I like some of the products that Everbank offers but they aren’t likely to see any of my money again.

[4plexowner]

I’ve worked in the same business park near UTC for 8 years now. Mostly engineering companies – Qualcom, SAIC, etc.

There are about 15 buildings in this area. All of them are 2 and 3 story office buildings which probably house 2-400 workers per building(?).

In eight years there has never been enough empty office space in this area to justify putting up ‘For Lease’ signs.

This year, three of the buildings are entirely empty. Two of them have large ‘For Lease’ signs in front.

[4plexowner]

Here are some possibilities – we have talked about these in other threads:

> CDs

> money market fund that invests only in short-term US govt notes and bills (Gabelli US Treasury Money Market Fund, for example, which currently pays 4.7% with check writing privileges) – benefit from rising interest rates (as compared to having a fixed-rate CD) – safer than other funds that hold all kinds of weird securities in their portfolios

> foreign currencies – Everbank (www.everbank.com) is an online bank that offers CDs which are denominated in foreign currencies – IMO, stick with Canada, Australia and New Zealand

> physical silver and gold bullion
~ stored in safe or safe deposit box or buried in the garden
~ Perth Mint Certificates (www.perthmint.com.au) – buy silver and gold with free storage at the mint in Australia

> silver and gold ETFs and funds:
~ Central Fund of Canada (CEF) holds about half and half silver and gold bullion
~ iShares Silver Trust (SLV) – each share backed by 10 ounces of physical silver
~ streetTracks Gold Trust (GLD) – each share backed by 1/10th ounce physical gold

> stocks of companies that mine silver and gold

> stocks of energy companies (natural gas, oil, uranium)

Lots of possibilities for parking money. Varying degrees of risk and potential reward. Each individual has to research the options and decide what feels right for them.

I believe silver and gold, whether it is physical or paper, is THE place to park investment money for the next five years at least. Zeal (www.zealllc.com) and Casey Research (www.caseyresearch.com) offer newsletters for people wanting to invest and/or speculate in the precious metals sector.

The energy sector comes in second place for me with an emphasis on companies exploring for natural gas in the US and Canada. Again, Zeal and Casey Research offer excellent guidance in the energy sector.

[4plexowner]

I was trying to get a feel for the rental market in downtown condos so I skimmed through the 6/25/06 Union-Trib’s rental ads.

Looks like $1300/mo is the low end of the market – that gets you a 1 bdrm condo.

$1800/mo lets you choose from several 2 bdrm units but most of the 2 bdrm units are $2200-2600/mo.

Then there are these:

> 2/2 in The Grande for $3600/mo
> 2/2 in The Grande for $3500/mo
> 2/2 in The Grande for $5500/mo
> 2/2 in the Rennaissance for $2950/mo
> 2/2 near Petco Park for $3000/mo
> 2/2 in the Pinnacle for $3000/mo
> 1/1.5 in the Meridian for $2600/mo

Are these $3000+ rents realistic? Are units actually renting at these prices? How long do they take to rent? Are people renewing leases at these prices or do they move out after the lease is up (high turnover rate)?

Here are rents in other areas of town that I am more familiar with:

> Mission Hills 3/2 Craftsman house with 3 car grg and fplc $3195/mo
> Mission Hills 4/4 house $3200/mo
> Mission Hills 2/2.5 house panoramic view $3500/mo
> Pt Loma 2/2.5 house panoramic view $3000/mo
> La Jolla 2/2 oceanfront condo $3500/mo (2 at this price)
> La Jolla 4/2 house with pool and fplc $2900/mo
> Mt Soledad 3/3 house with mountain & city views, gated community $3500/mo

I admit to being heavily biased against downtown condos but this quick review of the U-T rental section tells me that my bias is justified.

I can get more bang for my rental buck in other parts of town and I don’t have to put up with downtown traffic or homeless people using the bathroom on the side of the building that I am living in.

[4plexowner]

I’m looking for a bottom in the 2010-2011 timeframe.

[4plexowner]

Short answer: prices kept going up.

I’d buy a property and one year later it would provide the cash (via refi) to buy the next property – it seemed like a no-brainer at the time.

Cashflow grew more negative with each refi and subsequent purchase but I had income from my job to cover most of it and the refi’s covered the rest.

Rents were also rising so I could pretend that what I was doing made sense.

It finally dawned on me that I was not ‘investing’ in real estate – what I was doing was speculating on higher prices and rising rents.

[4plexowner]

Yes, all my profit came from appreciation. And a big chunk of my potential profit was spent on the negative cashflow that goes along with buying properties at a GRM over 10.

[Author]

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