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[quote=ctr70]I 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:)[/quote]
Thanks for the encouragement. I do believe I could manage a property very well. I actually know a lot of property managers in the industry I’m in and I’ve learned a lot from them. Of course there are always those horror stories, but lots of good ones too. It should would be nice if all the tenants were like I’ve been over the years to my landlords! I was actually talking to a lender friend over the weekend that mentioned 3.75% on investment property for a 15 year loan. I’ll take the 300 a month in the meantime, but that is encouraging as well as pretty much in line with what I’m thinking because then even if I end up with some repairs and a little vacancy, which I will of course try to avoid, then I’m still in the positive and have a property that will generate more income down the road and pay itself off eventually. Thanks for sharing your insight! Much appreciated.

[sdsurfer]

[quote=bearishgurl][quote=ctr70]I 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…[/quote]

ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.

One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.

Under normal circumstances, during this time period, rental properties should have escalated in value.

Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.[/quote]

Is this in San Diego? I guess I live a pretty sheltered life up in North County.

[sdsurfer]

[quote=bearishgurl][quote=ctr70]I 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…[/quote]

ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.

One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.

Under normal circumstances, during this time period, rental properties should have escalated in value.

Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.[/quote]

Is this in San Diego? I guess I live a pretty sheltered life up in North County.

[sdsurfer]

[quote=bearishgurl][quote=ctr70]I 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…[/quote]

ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.

One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.

Under normal circumstances, during this time period, rental properties should have escalated in value.

Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.[/quote]

Is this in San Diego? I guess I live a pretty sheltered life up in North County.

[sdsurfer]

[quote=bearishgurl][quote=ctr70]I 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…[/quote]

ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.

One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.

Under normal circumstances, during this time period, rental properties should have escalated in value.

Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.[/quote]

Is this in San Diego? I guess I live a pretty sheltered life up in North County.

[sdsurfer]

[quote=bearishgurl][quote=ctr70]I 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…[/quote]

ctr70, I only “broke even” in 9 years time because the area I purchased in, during the pendency of my ownership, became a haven for the PCP trade, in both cigarette and “grass” form. The area wasn’t this way when we purchased. SDPD “Community Policing” program eventually cleaned this up and all the local phone booths were ripped out as well. There was also a (later) intermittent problem with pimping and prostitution in the immediate area. This was cleaned up significantly (after we sold) by the SDPD Vice Squad.

One of my tenants moved out in the middle of the night due to being broken into. This caused us to not only repair the door jamb but install wrought iron on the door and all the windows.

Under normal circumstances, during this time period, rental properties should have escalated in value.

Moral of this story: Never buy property across the street from a large “vacant lot.” This is a “breeding ground” for societal ills.[/quote]

Is this in San Diego? I guess I live a pretty sheltered life up in North County.

[sdsurfer]

[quote=clearfund]Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.[/quote]
I agree. I’ve thought about the commercial side of things to a degree, but think I’ve got a lot to learn in that realm. I think there are good and bad deals in all facets of real estate. I do know I’ve got a friend of mine who’s company is growing and he mentioned some commercial properties that are leasing for 90 cents a square that wanted $3 a foot a couple years ago. I would think that whoever owns that building is getting taken to the cleaners right now with the property sitting vacant so they decided to lower the price to get someone in there, but probably will do well in the long term…just not sure how long term. I’m a lifelong learner though and foresee myself getting into commercial at some point. I would’nt mind owning one of those storage facilities. I’ve heard those things are cash cows. I’m looking to make smart investments with whatever money I can save whether its residential, commercial or a little bit of both.

[sdsurfer]

[quote=clearfund]Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.[/quote]
I agree. I’ve thought about the commercial side of things to a degree, but think I’ve got a lot to learn in that realm. I think there are good and bad deals in all facets of real estate. I do know I’ve got a friend of mine who’s company is growing and he mentioned some commercial properties that are leasing for 90 cents a square that wanted $3 a foot a couple years ago. I would think that whoever owns that building is getting taken to the cleaners right now with the property sitting vacant so they decided to lower the price to get someone in there, but probably will do well in the long term…just not sure how long term. I’m a lifelong learner though and foresee myself getting into commercial at some point. I would’nt mind owning one of those storage facilities. I’ve heard those things are cash cows. I’m looking to make smart investments with whatever money I can save whether its residential, commercial or a little bit of both.

[sdsurfer]

[quote=clearfund]Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.[/quote]
I agree. I’ve thought about the commercial side of things to a degree, but think I’ve got a lot to learn in that realm. I think there are good and bad deals in all facets of real estate. I do know I’ve got a friend of mine who’s company is growing and he mentioned some commercial properties that are leasing for 90 cents a square that wanted $3 a foot a couple years ago. I would think that whoever owns that building is getting taken to the cleaners right now with the property sitting vacant so they decided to lower the price to get someone in there, but probably will do well in the long term…just not sure how long term. I’m a lifelong learner though and foresee myself getting into commercial at some point. I would’nt mind owning one of those storage facilities. I’ve heard those things are cash cows. I’m looking to make smart investments with whatever money I can save whether its residential, commercial or a little bit of both.

[sdsurfer]

[quote=clearfund]Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.[/quote]
I agree. I’ve thought about the commercial side of things to a degree, but think I’ve got a lot to learn in that realm. I think there are good and bad deals in all facets of real estate. I do know I’ve got a friend of mine who’s company is growing and he mentioned some commercial properties that are leasing for 90 cents a square that wanted $3 a foot a couple years ago. I would think that whoever owns that building is getting taken to the cleaners right now with the property sitting vacant so they decided to lower the price to get someone in there, but probably will do well in the long term…just not sure how long term. I’m a lifelong learner though and foresee myself getting into commercial at some point. I would’nt mind owning one of those storage facilities. I’ve heard those things are cash cows. I’m looking to make smart investments with whatever money I can save whether its residential, commercial or a little bit of both.

[sdsurfer]

[quote=clearfund]Bearish – Yes, I am a commercial guy but not sure where you get “large multi-family complexes” from my post as there was no mention of that. However, if you bothered to read the end of my post I stated that educating oneself on how commercial works will serve you well on residential investments too.

Obviously there are good deals to be had in the residential world as many smart people have been very successful.[/quote]
I agree. I’ve thought about the commercial side of things to a degree, but think I’ve got a lot to learn in that realm. I think there are good and bad deals in all facets of real estate. I do know I’ve got a friend of mine who’s company is growing and he mentioned some commercial properties that are leasing for 90 cents a square that wanted $3 a foot a couple years ago. I would think that whoever owns that building is getting taken to the cleaners right now with the property sitting vacant so they decided to lower the price to get someone in there, but probably will do well in the long term…just not sure how long term. I’m a lifelong learner though and foresee myself getting into commercial at some point. I would’nt mind owning one of those storage facilities. I’ve heard those things are cash cows. I’m looking to make smart investments with whatever money I can save whether its residential, commercial or a little bit of both.

[sdsurfer]

[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.

My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.

For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]

Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.

Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.

It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.

My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.

I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!

[sdsurfer]

[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.

My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.

For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]

Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.

Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.

It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.

My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.

I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!

[sdsurfer]

[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.

My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.

For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]

Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.

Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.

It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.

My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.

I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!

[sdsurfer]

[quote=bearishgurl][quote=Kingside]My Encinitas investments were as a result of being a moveup buyer who did not sell my old properties. I still think this is a great way to go for first time investors in general.

My Escondido investments are a long complicated story which do not pertain to the average investor. I did pick up a triplex in Escondido earlier this year for under $200K. I tend not to look at triplexes priced in the 4’s, but that is just me.

For Encinitas, I manage them myself. For Escondido, I have a manager. What gives me peace of mind is buying at the right price from a cash flow perspective, not the location.[/quote]

Very sound advice, Kingside. You were very fortunate to recently pick up that triplex for <$200K. I am situated in an urban "sea of WWII boxes and mid-century ranches" owned by the "mostly-over-65 set" here in South County. Many of these owners are original owners who also own nearby sfr’s, sm apt complexes, parking lots and comm’l bldgs (acquired/purchased long ago). Yes, most of these properties ARE “walking distance” from their residences. However, some of these owners are VERY old now so can no longer manage their own properties. In some cases, their children are managing them. The ones that I have spoken to extensively have stated to me that they would only invest in areas they know very well and that is their local area.

Of course these properties cash flow for them because they are either paid-off or have a very low encumbrance against them. I have no doubt that even 40 years ago, they cash-flowed. Having a mo PITI of $138 or $168 and a mo rental income of $225 to $250 is cash flow. It’s all relative.

It is difficult to find this kind of deal today.[/quote]
Its absolutely all relative. My Grandparents have a couple condos on the water at Bristol Cove in Cbad that they bought for 75k, but if you ask them they will say that 75k was a lot in the 70s when they bought them.

My opinion of cash flow is simply bringing in more than my monthly payment,maint,tax, etc. I know this number will go up over the years and eventually pay for my retirement down the road. Of course it is difficult to pull off because if it was easy everyone would do it. It is one of the great things about living here in the US that you can work your ass off to save a few bucks then learn what to do with that money so that it works for you one day.

I just want to make the smartest decision I have with the information I have or can gain. I really appreciate everyone that has chimed in on this to help me gain a better understanding of the various options and better my chances of accomplishing my long term goals!

[Author]

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