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ctr70
ParticipantYes Riverside or San Bernardino County for $100k house $1,200 in rent. Also Lancaster/Palmdale for those numbers or better. I know of a lot of long term pros in Riverside & SB County in the buy & hold rental business and those are the numbers they have been getting. Not sure if they still are now. I personally don’t really want to buy up there though b/c it is too far.
91910 is a C+/B- neighborhood IMO, I don’t know all of it, maybe parts of it are B if you were generous. “A” neighborhoods are places like Carmel Valley, Encinitas, Rancho Bernardo, La Jolla, Point Loma, Del Mar, etc… “B” neighborhoods are San Carlos, Clairemont, Mira Mesa, etc.. “C” neighborhoods (and below.. and there is a wide variance from C- to C+) are places like El Cajon, Lemon Grove, Spring Valley, Vista, most of O-side, Escondido). Of course there are parts of places like El Cajon, etc.. in the hiils that are more “B”.
Bearishgirl has never owned a condo but seems to know they all have special assessments and plumbing problems:) I have looked at, talked to and reviewed hoas of dozens and dozens recently and many have not not had special assessments in decades or had very minor ones. But I’m sure there are some bad ones out there. And it is not like you never have your own little “special assessment” on a SFR when the roof leaks or something else breaks. SFR’s are definitely preferable over condos when all else is equal, but all else is not equal in SD County. But I think if you can find the right SFR that works and you have all the cash to put down and fix it, you should definatly go for it over a condo.
Just curious for other experienced investors who are IN the market right now chime in what they think of a $265k 91910 house as a excellent buy and hold investment? Kingside? Ren? Sdrealtor?
I DO think 91910 is a strong rental area, I just think the prices are a bit high for a decent ROI. I don’t know what is on the market right now, but it might be a stretch to get a 3/2/2 1500+ sf SFR on a +/- 7500 sf lot for $265k right now in a good area on nice street that would pull $1,850. I would have to check Craigslist too to see what types of properties are renting for $1,850 and if they are the types of properties that could be had for $265k.
Contacting owners direct of vacant properties is a “needle in the haystack” type of strategy and takes a ton of time and effort, using things like direct mail, and you may or may not find something after spending a ton of time most people don’t have. But if you have all that time and could get it to work it would be good. Bearishgirl have you ever bought a property that way? It’s something talked a lot by the “gurus” in books but I don’t meet many non-full time professional buyers that have ever done it. And most of those owners still know what their property is worth and won’t let it go for 20% under it’s current appraised value.
And bearishgirl you need to write a book about how you fix these major fixers for less than $5,000:) Apparently all the landlords and investors out there (many contractors themselves) have to spend at least $15k min to fix up most fixer upper SFR rentals they buy right now to make them rent ready. Go visit a few dozen fixers with a yellow pad and cost it out, they have a lot of stuff wrong with them. And it all adds up. But who knows maybe you could do it with all your experience and doing everything yourself, but not many people can. I’m curious investors out there, how much do you usually spend to fix up a fixer upper SFR you turn into a rental? The people that I have talked to $15k-$25k. We’re talking fixers here. And most professionals buying rentals don’t have the time, or their time is worth a lot more per hour, than to learn to do things like lay tile or carpet themselves:) But yeah if you know how to do that stuff or like it, you can save a little money.
ParticipantI also think it is a myth that the average retail buyer can waltz out there and buy something 20% below market off the MLS with his Realtor. From what I see in the market, there are really only 2 sources of true under market deals: 1. Trustee sale auctions (all cash), 2. Major fixer disasters that mostly the flippers buy with hard money or cash.
Most retail MLS buyers getting mortgages to buy even if they spend a ton of time looking and make a lot of offers will likely pay 95% or more of market. A big mistake many make is buying a “fixer upper” that needs $30k in fix for only $30k less than the similar fixed up house, thinking they are getting a deal. Why not just buy the clean one and save yourself all the work! And finance the costs of fix up done by someone else at 4% for 30 years vs. paying it out of your pocket. Now if you get it $60k under market and it needs $20k fix, that is getting better.
Berishgirl, thanks for the info on your rental across the vacant lot. That is a good warning, you can’t be too careful with location. But I still do not see the logic and where the ROI is on a $265k 70 year old house that gets $1,600 in rent:) Break that out for me. Now a $100k house that gets $1,250 in rent, that is more like it.
ParticipantI also think it is a myth that the average retail buyer can waltz out there and buy something 20% below market off the MLS with his Realtor. From what I see in the market, there are really only 2 sources of true under market deals: 1. Trustee sale auctions (all cash), 2. Major fixer disasters that mostly the flippers buy with hard money or cash.
Most retail MLS buyers getting mortgages to buy even if they spend a ton of time looking and make a lot of offers will likely pay 95% or more of market. A big mistake many make is buying a “fixer upper” that needs $30k in fix for only $30k less than the similar fixed up house, thinking they are getting a deal. Why not just buy the clean one and save yourself all the work! And finance the costs of fix up done by someone else at 4% for 30 years vs. paying it out of your pocket. Now if you get it $60k under market and it needs $20k fix, that is getting better.
Berishgirl, thanks for the info on your rental across the vacant lot. That is a good warning, you can’t be too careful with location. But I still do not see the logic and where the ROI is on a $265k 70 year old house that gets $1,600 in rent:) Break that out for me. Now a $100k house that gets $1,250 in rent, that is more like it.
ParticipantI also think it is a myth that the average retail buyer can waltz out there and buy something 20% below market off the MLS with his Realtor. From what I see in the market, there are really only 2 sources of true under market deals: 1. Trustee sale auctions (all cash), 2. Major fixer disasters that mostly the flippers buy with hard money or cash.
Most retail MLS buyers getting mortgages to buy even if they spend a ton of time looking and make a lot of offers will likely pay 95% or more of market. A big mistake many make is buying a “fixer upper” that needs $30k in fix for only $30k less than the similar fixed up house, thinking they are getting a deal. Why not just buy the clean one and save yourself all the work! And finance the costs of fix up done by someone else at 4% for 30 years vs. paying it out of your pocket. Now if you get it $60k under market and it needs $20k fix, that is getting better.
Berishgirl, thanks for the info on your rental across the vacant lot. That is a good warning, you can’t be too careful with location. But I still do not see the logic and where the ROI is on a $265k 70 year old house that gets $1,600 in rent:) Break that out for me. Now a $100k house that gets $1,250 in rent, that is more like it.
ParticipantI also think it is a myth that the average retail buyer can waltz out there and buy something 20% below market off the MLS with his Realtor. From what I see in the market, there are really only 2 sources of true under market deals: 1. Trustee sale auctions (all cash), 2. Major fixer disasters that mostly the flippers buy with hard money or cash.
Most retail MLS buyers getting mortgages to buy even if they spend a ton of time looking and make a lot of offers will likely pay 95% or more of market. A big mistake many make is buying a “fixer upper” that needs $30k in fix for only $30k less than the similar fixed up house, thinking they are getting a deal. Why not just buy the clean one and save yourself all the work! And finance the costs of fix up done by someone else at 4% for 30 years vs. paying it out of your pocket. Now if you get it $60k under market and it needs $20k fix, that is getting better.
Berishgirl, thanks for the info on your rental across the vacant lot. That is a good warning, you can’t be too careful with location. But I still do not see the logic and where the ROI is on a $265k 70 year old house that gets $1,600 in rent:) Break that out for me. Now a $100k house that gets $1,250 in rent, that is more like it.
ParticipantI also think it is a myth that the average retail buyer can waltz out there and buy something 20% below market off the MLS with his Realtor. From what I see in the market, there are really only 2 sources of true under market deals: 1. Trustee sale auctions (all cash), 2. Major fixer disasters that mostly the flippers buy with hard money or cash.
Most retail MLS buyers getting mortgages to buy even if they spend a ton of time looking and make a lot of offers will likely pay 95% or more of market. A big mistake many make is buying a “fixer upper” that needs $30k in fix for only $30k less than the similar fixed up house, thinking they are getting a deal. Why not just buy the clean one and save yourself all the work! And finance the costs of fix up done by someone else at 4% for 30 years vs. paying it out of your pocket. Now if you get it $60k under market and it needs $20k fix, that is getting better.
Berishgirl, thanks for the info on your rental across the vacant lot. That is a good warning, you can’t be too careful with location. But I still do not see the logic and where the ROI is on a $265k 70 year old house that gets $1,600 in rent:) Break that out for me. Now a $100k house that gets $1,250 in rent, that is more like it.
ParticipantI wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage+taxes+insurance+vacancy+repairs+credit loss, etc…
I agree with sdrealtor & kingside that small condos in good locations with low hoas look good. Condo prices have fallen further than SFR’s so the numbers can be better AND the locations are much better.
The SFR’s tend to not pencil that well in SD County and you have to buy a major fixer “disaster” in a rougher “C” neighborhood (like the flippers do) to get a below market deal. Those are 50-90 year old houses that require a lot of fix are likely a lot of maintenance over the years. What might work is if you found a SFR with a variance with an extra in-law unit to juice the cash flow numbers. SFR’s also makes your cash investment higher because you have 20% down + another big chunk of change to fix it up. The condos many times need almost no fix work & they are less expensive so the 20% down is less. So your out of pocket is less. There are plenty of condos that are finance-able.
For units you have to go into rougher areas to make the numbers work, “C” neighborhoods. The numbers for units don’t work well even B neighborhoods in SD, certainly not A neighborhoods. Most of the units will be very old maintenance intense properties too. And you have to pay the water bill (vs. tenant pays it SFR and hoa pays it in a condo). It’s one thing to own a SFR in a rough neighborhood b/c SFR will always get a better tenant even in a rougher hood. But you have to make sure you have the stomach for managing units in rougher areas. There could be lots of turnover and credit loss.
SFR’s in Inland Empire CA, Phoenix, Vegas do pencil well and properties are much newer. Just have to be real picky in neighborhoods. And the worry is can you keep them rented?
I would definitely manage a property myself if it is a SFR and only in Escondido and I lived in Encinitas. It is not that hard. And you save so much on cash flow over the years. I manage myself a SFR rental I own in another state and it’s not that big of a deal. I have probably saved $10,000+ in property management costs over the last 7 or so years. The main thing you need is a couple of really good local handymen you can call if something breaks. Do the tenant screening and leasing all yourself. There’s no fertilizer like a farmers shadow:)
ParticipantI wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage+taxes+insurance+vacancy+repairs+credit loss, etc…
I agree with sdrealtor & kingside that small condos in good locations with low hoas look good. Condo prices have fallen further than SFR’s so the numbers can be better AND the locations are much better.
The SFR’s tend to not pencil that well in SD County and you have to buy a major fixer “disaster” in a rougher “C” neighborhood (like the flippers do) to get a below market deal. Those are 50-90 year old houses that require a lot of fix are likely a lot of maintenance over the years. What might work is if you found a SFR with a variance with an extra in-law unit to juice the cash flow numbers. SFR’s also makes your cash investment higher because you have 20% down + another big chunk of change to fix it up. The condos many times need almost no fix work & they are less expensive so the 20% down is less. So your out of pocket is less. There are plenty of condos that are finance-able.
For units you have to go into rougher areas to make the numbers work, “C” neighborhoods. The numbers for units don’t work well even B neighborhoods in SD, certainly not A neighborhoods. Most of the units will be very old maintenance intense properties too. And you have to pay the water bill (vs. tenant pays it SFR and hoa pays it in a condo). It’s one thing to own a SFR in a rough neighborhood b/c SFR will always get a better tenant even in a rougher hood. But you have to make sure you have the stomach for managing units in rougher areas. There could be lots of turnover and credit loss.
SFR’s in Inland Empire CA, Phoenix, Vegas do pencil well and properties are much newer. Just have to be real picky in neighborhoods. And the worry is can you keep them rented?
I would definitely manage a property myself if it is a SFR and only in Escondido and I lived in Encinitas. It is not that hard. And you save so much on cash flow over the years. I manage myself a SFR rental I own in another state and it’s not that big of a deal. I have probably saved $10,000+ in property management costs over the last 7 or so years. The main thing you need is a couple of really good local handymen you can call if something breaks. Do the tenant screening and leasing all yourself. There’s no fertilizer like a farmers shadow:)
ParticipantI wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage+taxes+insurance+vacancy+repairs+credit loss, etc…
I agree with sdrealtor & kingside that small condos in good locations with low hoas look good. Condo prices have fallen further than SFR’s so the numbers can be better AND the locations are much better.
The SFR’s tend to not pencil that well in SD County and you have to buy a major fixer “disaster” in a rougher “C” neighborhood (like the flippers do) to get a below market deal. Those are 50-90 year old houses that require a lot of fix are likely a lot of maintenance over the years. What might work is if you found a SFR with a variance with an extra in-law unit to juice the cash flow numbers. SFR’s also makes your cash investment higher because you have 20% down + another big chunk of change to fix it up. The condos many times need almost no fix work & they are less expensive so the 20% down is less. So your out of pocket is less. There are plenty of condos that are finance-able.
For units you have to go into rougher areas to make the numbers work, “C” neighborhoods. The numbers for units don’t work well even B neighborhoods in SD, certainly not A neighborhoods. Most of the units will be very old maintenance intense properties too. And you have to pay the water bill (vs. tenant pays it SFR and hoa pays it in a condo). It’s one thing to own a SFR in a rough neighborhood b/c SFR will always get a better tenant even in a rougher hood. But you have to make sure you have the stomach for managing units in rougher areas. There could be lots of turnover and credit loss.
SFR’s in Inland Empire CA, Phoenix, Vegas do pencil well and properties are much newer. Just have to be real picky in neighborhoods. And the worry is can you keep them rented?
I would definitely manage a property myself if it is a SFR and only in Escondido and I lived in Encinitas. It is not that hard. And you save so much on cash flow over the years. I manage myself a SFR rental I own in another state and it’s not that big of a deal. I have probably saved $10,000+ in property management costs over the last 7 or so years. The main thing you need is a couple of really good local handymen you can call if something breaks. Do the tenant screening and leasing all yourself. There’s no fertilizer like a farmers shadow:)
ParticipantI wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage+taxes+insurance+vacancy+repairs+credit loss, etc…
I agree with sdrealtor & kingside that small condos in good locations with low hoas look good. Condo prices have fallen further than SFR’s so the numbers can be better AND the locations are much better.
The SFR’s tend to not pencil that well in SD County and you have to buy a major fixer “disaster” in a rougher “C” neighborhood (like the flippers do) to get a below market deal. Those are 50-90 year old houses that require a lot of fix are likely a lot of maintenance over the years. What might work is if you found a SFR with a variance with an extra in-law unit to juice the cash flow numbers. SFR’s also makes your cash investment higher because you have 20% down + another big chunk of change to fix it up. The condos many times need almost no fix work & they are less expensive so the 20% down is less. So your out of pocket is less. There are plenty of condos that are finance-able.
For units you have to go into rougher areas to make the numbers work, “C” neighborhoods. The numbers for units don’t work well even B neighborhoods in SD, certainly not A neighborhoods. Most of the units will be very old maintenance intense properties too. And you have to pay the water bill (vs. tenant pays it SFR and hoa pays it in a condo). It’s one thing to own a SFR in a rough neighborhood b/c SFR will always get a better tenant even in a rougher hood. But you have to make sure you have the stomach for managing units in rougher areas. There could be lots of turnover and credit loss.
SFR’s in Inland Empire CA, Phoenix, Vegas do pencil well and properties are much newer. Just have to be real picky in neighborhoods. And the worry is can you keep them rented?
I would definitely manage a property myself if it is a SFR and only in Escondido and I lived in Encinitas. It is not that hard. And you save so much on cash flow over the years. I manage myself a SFR rental I own in another state and it’s not that big of a deal. I have probably saved $10,000+ in property management costs over the last 7 or so years. The main thing you need is a couple of really good local handymen you can call if something breaks. Do the tenant screening and leasing all yourself. There’s no fertilizer like a farmers shadow:)
ParticipantI wouldn’t buy anything to “break-even”. Why would you buy an investment to “break-even” and “hope” for appreciation with all the work and risk it takes to own rental property? Even if it does appreciate, to “realize” that appreciation and sell you pay a ton of taxes and costs anyway leaving you with 60 cents on the dollar of that appreciation. Yes you could 1031X and defer taxes, but that often happens at market peaks and you buy into another inflated property and you are forced to rush (I have heard of more horror stories of investors doing 1031X vs. just selling and paying the tax and depreciation recapture.) If you put 20% down & get a loan shoot for making $300+ per month TRUE positive cash flow after mortgage+taxes+insurance+vacancy+repairs+credit loss, etc…
I agree with sdrealtor & kingside that small condos in good locations with low hoas look good. Condo prices have fallen further than SFR’s so the numbers can be better AND the locations are much better.
The SFR’s tend to not pencil that well in SD County and you have to buy a major fixer “disaster” in a rougher “C” neighborhood (like the flippers do) to get a below market deal. Those are 50-90 year old houses that require a lot of fix are likely a lot of maintenance over the years. What might work is if you found a SFR with a variance with an extra in-law unit to juice the cash flow numbers. SFR’s also makes your cash investment higher because you have 20% down + another big chunk of change to fix it up. The condos many times need almost no fix work & they are less expensive so the 20% down is less. So your out of pocket is less. There are plenty of condos that are finance-able.
For units you have to go into rougher areas to make the numbers work, “C” neighborhoods. The numbers for units don’t work well even B neighborhoods in SD, certainly not A neighborhoods. Most of the units will be very old maintenance intense properties too. And you have to pay the water bill (vs. tenant pays it SFR and hoa pays it in a condo). It’s one thing to own a SFR in a rough neighborhood b/c SFR will always get a better tenant even in a rougher hood. But you have to make sure you have the stomach for managing units in rougher areas. There could be lots of turnover and credit loss.
SFR’s in Inland Empire CA, Phoenix, Vegas do pencil well and properties are much newer. Just have to be real picky in neighborhoods. And the worry is can you keep them rented?
I would definitely manage a property myself if it is a SFR and only in Escondido and I lived in Encinitas. It is not that hard. And you save so much on cash flow over the years. I manage myself a SFR rental I own in another state and it’s not that big of a deal. I have probably saved $10,000+ in property management costs over the last 7 or so years. The main thing you need is a couple of really good local handymen you can call if something breaks. Do the tenant screening and leasing all yourself. There’s no fertilizer like a farmers shadow:)
ParticipantIt could definitely be a long while for a you folks who bought to just break-even (as you have stated that you already know). Because your property has to really go up say at least 15% just to break even. Because of all the costs real estate has when you buy and sell:
1. Closing costs when you buy
2. All the money you put into fixing up the house
3. Paying 6% to a Realtor when you sell
4. Closing costs that you have when you sell…So even if there was a 10-15% appreciation, all that would do would allow you to break even maybe when you did sell. If prices were flat you would actually lose a nice chuck of change if you had to sell a few yeas down the road. So it certainly is not out of the question that it could be a decade+ to just be able to sell and break even. Especially in higher priced North County Coastal where there are so many headwinds facing any future price appreciation (rising interest rates, fannie mae lowering the loan limit from $729k to $625k, etc…)
But I guess they say “your home” is not supposed to be an investment.
ParticipantIt could definitely be a long while for a you folks who bought to just break-even (as you have stated that you already know). Because your property has to really go up say at least 15% just to break even. Because of all the costs real estate has when you buy and sell:
1. Closing costs when you buy
2. All the money you put into fixing up the house
3. Paying 6% to a Realtor when you sell
4. Closing costs that you have when you sell…So even if there was a 10-15% appreciation, all that would do would allow you to break even maybe when you did sell. If prices were flat you would actually lose a nice chuck of change if you had to sell a few yeas down the road. So it certainly is not out of the question that it could be a decade+ to just be able to sell and break even. Especially in higher priced North County Coastal where there are so many headwinds facing any future price appreciation (rising interest rates, fannie mae lowering the loan limit from $729k to $625k, etc…)
But I guess they say “your home” is not supposed to be an investment.
ParticipantIt could definitely be a long while for a you folks who bought to just break-even (as you have stated that you already know). Because your property has to really go up say at least 15% just to break even. Because of all the costs real estate has when you buy and sell:
1. Closing costs when you buy
2. All the money you put into fixing up the house
3. Paying 6% to a Realtor when you sell
4. Closing costs that you have when you sell…So even if there was a 10-15% appreciation, all that would do would allow you to break even maybe when you did sell. If prices were flat you would actually lose a nice chuck of change if you had to sell a few yeas down the road. So it certainly is not out of the question that it could be a decade+ to just be able to sell and break even. Especially in higher priced North County Coastal where there are so many headwinds facing any future price appreciation (rising interest rates, fannie mae lowering the loan limit from $729k to $625k, etc…)
But I guess they say “your home” is not supposed to be an investment.
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