[sdsurfer]

I think you just need to run your numbers based on how much you are looking to invest.

It’s a good idea to start out with a condo if you cannot afford a single family home. You can get your feet wet without as much risk.

You have more upside with a single family since you can add a granny flat, etc. However, it’s a lot more expensive to buy so it’s more risk.

I always base my numbers on prevailing rents (maybe a hair below) and 25% down.

Feel free to DM me with any questions!

Josh

[sdsurfer]

If it was me, I’d start with one out of state unit before I go for 8 of them. Get a feel for owning out of state and how the relationship with your management company is going to be before you make the larger investment. I know so many people that have been talking about investing in multi-unit properties “because the price per unit is better”, but I’d think the expenses/maintenance are higher too.

[sdsurfer]

I’d think about staying the course your already on. Personally, I’d look into Vista or the areas with less than ideal schools (which keeps the price down) since that will not matter in your situation. Also, since everything has been going up these zones have gone up a bit. However, not nearly as much in my opinion.

I’m very similar in the risk averse and do not know who to trust areas so I just do a lot of research myself. I’d do the same if I were you.

I feel like most people that get killed in real estate do not have the reasonable approach it seems you do. They typically buy based on appreciation and value rather than rents and monthly cash flow. I was essentially trying to answer the same questions as you a couple years ago on this site and trying to figure out a scenario that would force rents down. I’m ok with not making money some years, but my greatest fear is being too risky and losing money. I worked too hard to earn it.

This chart, which Rich helped me find, had a lot to do with my ultimate decision because I wanted it to be driven by data.

Here you go: https://fred.stlouisfed.org/series/CUUSA424SEHA

Feel free to send me a message if you have any questions and good luck!

Josh

[sdsurfer]

I’m stoked too. Glad everything is going well!

[sdsurfer]

You’d rather work with an attorney than a realtor? Wow. I think it’s insane that people have that much distrust of realtors to prefer an attorney. There are a lot of good realtors out there if you ask me and they only get paid at the close of escrow vs. an attorney you have to pay just to meet with.

You might want to just find a good escrow officer and title rep to help with the paperwork.

I’d personally just find a realtor and negotiate on the commission a bit since you already have the property. Maybe get an appraisal on the value unless that has already been agreed upon.

[sdsurfer]

To be present to those around me whether it be my kids, my wife, my neighbor or just sitting there by myself. It’s a work in progress for sure that I’m always honing.

[sdsurfer]

I’d think you can go 25% down unless something changed VERY recently. I’ve worked with Michael Deery at Citiwide Financial quite a bit if you want to ask him for a 2nd opinion.

[sdsurfer]

Sounds great. I’d probably do it and if it does not work out you still have a killer guest room. My Mom does Airbnb out of Kingman AZ and I’m amazed how well it’s going. Seems to be a lot of people out there just looking for a place to crash to and from the Grand Canyon. I’d think you’d do really well with similar people going to and from SD.

[sdsurfer]

I tried pretty hard one time then just gave up. I was putting a fence in and called a neighbor that does it, but he said, “he mostly does city work and he’s too busy” so he referred me to someone else in town. I called them and got a call back about a week later and they said they recommend someone else because they have too much going on.

So I googled it and ended up here: https://land-surveyors.promatcher.com/cost/san-diego-ca-land-surveyors-costs-prices.aspx

Seems like $800 or so. Since my estimate for the fence was $1000 that seemed insane so I just spoke with my neighbor and we kind of eyeballed it and put some markers in the ground and called it a day.

[sdsurfer]

[quote=FlyerInHi]I carry cash because when you go out with friends, it’s best to have cash so you can a split the bill. Always be prepared with cash otherwise you will have few friends.

Plus I like small independently owned restaurant, not chains. I don’t pay with a credit card at small businesses because it costs them money. And I think the waiters like cash. I don’t think my favorite Thai restaurant wants CC.

There are also some things to buy on Craigslist for home remodel/furnishing. I just bought a 5×4 vinyl window for $50. I rent out my places fully furnished.[/quote]

I’m glad you see it this way and I do too. I figure every little bit counts for a small business and they sometimes get strongarmed into the merchant aspect because the card companies work so hard to promote their rewards and use of cards while cash does not have a marketing campaign. I figure if I can save them a few bucks by paying in cash then it’s an additional way to support small businesses.

[sdsurfer]

For starters…I’d try to buy a place I can live in that is a little dated that I can upgrade along the way for some sweat equity in addition to your downpayment and your rent never getting jacked on your again.

If you decide to go the investment property route I’d spend as little as possible so you have less skin in the game and get a feel for being a landlord (or working with a management company) without as much risk man. Why go so huge on the first one? Some might mention leverage and cheap money right now, but it works both ways and nobody is certain what the market will do.

I agree on rents in a recession based on personal logic, but I honestly wish I could find more data on that. I’ve always wanted to find a graph/chart that goes back 30 years showing rents. I’ve searched quite a bit and the closest thing I’ve found is this (Rich actually found it and shared it with me a while back…thanks Rich!).

https://fred.stlouisfed.org/series/CUUSA424SEHA

The chart is quite compelling since it shows the past 3 recessions (shaded in), but I’ve always wanted to find something that says what North County SD has done in my lifetime since that is where I live and like to invest because I like managing my own properties. My guess is that it’s even more “up and to the right” as they say, but I’ve been unsuccessful in finding solid data.

Lastly, I’d say meet up with someone who has done what you are looking to do and can share real insight. Is your friend recommending you to do something with your money that they have not even done? I’d find someone that has done it to share the good and the bad to help you with your decision. Feel free to send me a message with any specific questions I might be able to help with too.

Good luck whatever you do!

[sdsurfer]

The good GC’s are busy right now so they dont have to be available. I’ve had quite a few friends mention that during times like these you only do what is necessary and you wait for a downturn to do the major remodel if you can since it’s less expensive and more GC’s are available.

[sdsurfer]

I’d think you can use the low inventory aspect to dictate the closing date a bit too. I’m not sure your reasoning, but sounds like it’s best for you so I’d just let everyone know from day one that ideally you’d like to close escrow on Friday/June 29th. Of course the buyer could have a scenario that prohibits it, but if you give people clear expectations from the beginning it could be perfect. Similar to scenarios where people need to close within a certain calendar year or the next for tax reasons you can have a shorter or longer escrow and let everyone involved (buyer, escrow, etc) know about it for clear expectations.

Good luck and congrats on retirement!

[sdsurfer]

For full disclosure I used to be an agent, but focus on other things these days and only use my license for my own investments for the most part.

I think in your instance everything you did makes perfect sense and seems logical since you knew the seller. If someone comes across that scenario is makes perfect sense imo.

Personally, I just want value being brought to the table whenever someone is paid in any profession.

If I was working with a buyers agent I’d say I want them to find me a place for a little under market (say 10%) and if I find it myself then they will not be paid since I found it. Conversely, I’d say if I’m a seller I’d list 10% above what I’m looking to get and let them know there will be no price reductions. I’d establish a realistic time-frame to give them a shot and if they do not sell it within that timeframe I’ll be cancelling the listing. I might add an addendum that if someone that came through during the listing period buys after the listing period they must pay full list price in order for the agent to be paid.

The only reason I chime in here is that I think Realtors get a bad wrap a lot of the time. I think there are many good ones that deserve what they are paid, but there are others that do not. People tend to generalize on the value of the profession, but I do not believe everyone in any profession is equal. Some people just work harder and deserve to be paid and vice versa.

Cheers!

[sdsurfer]

Some good advice above, but I thought I’d throw a little optimism in the hat since it seems you do feel this is a unique opportunity.

FWIW…I think you have the right mindset thinking that it’s a longshot, but sometimes things work out if you give it a shot and are a bit optimistic. I’d do as much research as you can yourself online, but I’d probably also talk to a realtor you know and get some advice for free since they do not get paid unless you close escrow. I think the model works because they have to earn your business by providing some value before they get paid.

There are definitely horror stories about wasting a lot of time with auctions and getting overbid and all, but there are people that get lucky too. I know a guy bought a duplex in Encinitas down the street from me about a year ago for 845k and I”m pretty sure that guy scored considering a place on the same street just closed for 1.6. In the instance I’m describing it was through Auction.com and you could have an agent represent you and you could get a loan on the property. There was a 5% premium and there were certain rules/disclosures you had to follow, but you could read all the rules online on their website. It was very straightforward in my opinion and I wish I would have bought the place myself, but I told myself my limit was 825k prior to participating and I had to stick to my limit when someone outbid me….in hindsight I should have gone for it, but I also always think there is another opportunity.

Good luck to you!

[Author]

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