Home Buying in 92101>Question Details

Jane, Home Buyer in San Diego County, CA

What building downtown makes most sense in terms of investment?

Asked by Jane, San Diego County, CA Tue Feb 2, 2010

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Hi, Jane,
I personally live downtown San Diego, and work for Prudential California Realty's office that's located in the heart of Gaslamp on 5th ave and Market Street, so Downtown San Diego condos are our specialization.
I have also worked with numerous investors on purchasing properties downtown, from foreclosures and short sales to high end exclusive penthhouses.
Let me give you just couple of pointers:
1. Focus on Gaslamp Square and Marina Neighborhoods
2. Only on some properties under around $420,000, rent could actually cover the mortgage payments plus HOA's and taxes
3. 2br 2 ba are better for investment, since it's easier to rent them out and they are better for future resale purposes
4. Looks for buildings with low HOA's, but as much amenities as you can get
5. Try to find a desirable split floor plan or even 2 master bedroom one
6. Preferably 2 parking spots

And more. Bottom line is there are maybe only 3 4 buildings that I believe would be really good for you. Among them: Gaslamp City Square, Trellis, Crown Bay and Pacifi Terrace. Reasonable HOA's and pricing enables owners to rent out their units in those buildings and sometimes even cover their mortgage payments.
I know of a couple of listings that are on the market right now in $350's. Will be glad to provide more information to you if you'd like,

Sincerely,

Khrystyna Chorna
Prudential California Realty
619.808.7064
khrystynachorna@yahoo.com
2 votes Thank Flag Link Tue Feb 2, 2010
Hello Jane,

I live and work downtown and know the inventory very well. I agree with Christina below with her ideas about buying a 2 bedroom, but areas outside of Gaslamp and the Marina definitely pencil out better for investment purposes. I run numbers and put together spreadsheets for investors all the time and they all ask the same questions. For investing right now, I like these buildings:

East Village- Metrome, M2i (low HOA and are by new Thomas Jefferson School of Law) http://bit.ly/asHxak
Little Italy- La Vita http://bit.ly/bqLRKR
Cortez Hill- The Mills (2 bedrooms for $300k and close to Calwest school of law) http://bit.ly/bL399G
Columbia District- Treo http://bit.ly/bwlwLe
Marina- Crown Bay http://bit.ly/aLuVag

If you would like me to send you a breakdown of monthly payments including HOA, taxes and the rent you could expect, please let me know and I would be happy to do so.

Best of luck,

Chad Dannecker
Chad@DanneckerAndAssociates.com
2 votes Thank Flag Link Wed Feb 3, 2010
Read this article to see which Downtown San Diego condo buildings are the best investments and see charts with examples of how the numbers work out. See the projected annual return on investment and potential for gain in the Downtown San Diego Condo market. http://bit.ly/dCbqQU
Web Reference: http://bit.ly/dCbqQU
1 vote Thank Flag Link Sun Feb 14, 2010
Remember most California real estate investors have made their profits on appreciation not cash flow so be sure to consider a buildings potential for appreciation and not just cash flow as an apartment building investor would.
0 votes Thank Flag Link Wed May 5, 2010
Hey Jane, I saw your questions and I hope you have found a home by now. Due to HOA's not many condos cash flow downtown. Not to say it can not happen, but If you put a good downpayment in place, you can possibly cash flow the investment. Try Park Terrace, Smart Corner or Vantage Pointe for some killer deals right now. http://www.TheLaJollaLife.com

http://www.thelajollalife.com/condo/Park-Terrace
0 votes Thank Flag Link Sat Apr 24, 2010
I would agree with Chad Dannecker numbers don't lie.

Here is a great article that come out today, a must read.
"When There's Nowhere To Invest, Invest Nowhere"
http://bit.ly/bWS4vG
0 votes Thank Flag Link Mon Apr 12, 2010
David,
The HOA's in Bayside are around $800 plus minus, depending on sq footage.
They are a great product. Truly.

But let's be honest here. The prices on the high end market in San Diego haven't hit the rock bottom yet. I don't think it would be a great investment, especially considering that regular rent in those buildings would hardly cover even 2/3 of the regular mortgage. Not even talking about taxes and HOA's..
0 votes Thank Flag Link Wed Feb 3, 2010
Hi Jane,

I've lived and sold in downtown for a number of years.... I've also bought property in downtown San Diego. In this market, obviously the best investment is to get a good price on a unit in a quality development. If you are buying to live in then what a quality development is to you depends on lifestyle and desires in ammenites. However, if you are looking to rent, I think investors should look for something that has lower HOAs with a younger demographic within the building. The majority of renters in downtown are young professionals and they would rather pay $400-$500 less a month in a quality building, in a fun area, without a concierge, pool and other ammenities you'll find in the developments with $800+ HOAs. Now, being a younger professional myself, this is also where I would buy to live!

I would suggest M2i and Park Terrace in East Village (East Village is still an up and coming area... but very fun for young professionals... a lot of new businesses/restaurants opening all the time) and possibly Doma or La Vita in Little Italy. Although, if you can negotiate a great price in some of the buildings that are a slight step up in HOA cost (like Aria on Cortez Hill, Alta in the Gaslamp, etc) that have moderate home owner's dues but are a slice above as far as the ammentites and attractiveness to renters. That is also something to consider.

I also think that much of the time the best deals are found in shopping the short sales because a buyer has to wait it out and that can get very frustrating. I think many buyers would rather bid up on a foreclosure or standard sale to get the instant gratification rather than waiting it out on a short sale. And if you're making multiple offers on short sales, at least one - but often times several - short sale listings will eventually pop with an opportunity to open escrow!

Best of luck!
Tara

Tara Steinke
Residential Sales & Appraisals
Living and Working in Downtown San Diego
619-384-6014
Web Reference: http://san-diego-condos.net
0 votes Thank Flag Link Wed Feb 3, 2010
@ Mark.. what are the HOA's there? I think BOSA puts out a great product, however they tend to be very litgious. Thats just my opinion
0 votes Thank Flag Link Wed Feb 3, 2010
Hi Jane,
Easy answer, Bayside condo building, best quality downtown, builder discounts, and preserved views, its the view people want, buy a water view that you know you will not lose. Another choice if you like lofts is Parkloft, see the one and only condo comparison chart here http://www.liveatthetop.com/comparison.php this still has 2009 prices on it, will be updated in about another week.
0 votes Thank Flag Link Wed Feb 3, 2010
Thank you for all the answers. Very helpful
0 votes Thank Flag Link Wed Feb 3, 2010
Hi Jane,

Alot of good answers here; it most certainly will depend on your investment goals, how long you plan to hold the property, your goals as far as cash flow or flip. There is definately lots of opportunities. I currently list and sell bank owned homes and see alot of them being purchased by investors. If you'd like to see what is currently available downtown please feel free to browse my website at http://www.downtownREOs.com for some ideas.

Sincerely,
Katrina Hamilton
Direct: 858-405-4407
0 votes Thank Flag Link Wed Feb 3, 2010
Hello Jane,
most new condo buildings in downtown San Diego will not give you a positive cash flow for investment purposes due to high HOA's, price point and rent levels. I invest in several multi-unit complexes in North Park and Bankers Hill. This is where you have chance, with a large down payment, to get positive cash flow and take advantage of the tax benefits of ownership as well as appreciation over time. If you want to talk to me about investment opportunities in San Diego, give me a call and I will show you what you can do. Thanks

619-823-2120
http://www.TheSDLife.com
Web Reference: http://www.TheSDLife.com
0 votes Thank Flag Link Wed Feb 3, 2010
Hi Jane, If I were your advisor, I would advise you to consider alternative investments in real estate elsewhere in San Diego. Do you currently own other investment property or is your 1st?

There are numerous variables you need to consider when investing. Such as, are you going to manage the property or hire a property manager? What and how are you protecting your investment with the immenient tax changes that will effect your hard earned money.

If you truly want to be an investor, you will want to know what how the best ones make their money. Finding a home or condo is the easiest part of the equation. Its making sure you dont blow your cash is the hard part.
0 votes Thank Flag Link Wed Feb 3, 2010
Hi Jane,

There are too many variables to give you a quick answer. To start, I would ask what return on investment are you looking for? How much are you putting down? HOA's dues (which can be very high in some buildings and very reasonable in others) and the option of corporate/vacation rentals are two big factors that will affect your investment strategy for Downtown SD.

Feel free to call or email to discuss further.

All the Best,

Cleve

619.822.4000
cleve@nuvilla.com
Web Reference: http://www.nuvilla.com
0 votes Thank Flag Link Tue Feb 2, 2010
I know this sounds flippant, but it really depends on what you want, and how much you have to invest! If you contact me I will put you in touch with a guy that has been investing in downtown real estate for 30 years. And he's still active. Just drop me a line and I'll get you connected with him. Kindly, Paul
0 votes Thank Flag Link Tue Feb 2, 2010
Hi there Jane, It really depends on your financial goals. Every investor will have different goals and strategies.
Some want long term rentals, some want flips.
Some want high cap rates, some want tax benefits.
There is a lot to consider as an investor.
If you are not represented and would some excellent tools that I give to investor clients please drop me a line

Kind Regards
Michael Barron
Real Estate Consultant
Realtor/MBA/Certified Auction Specialist.
Short sale Specialist
First Team Real Estate
0 votes Thank Flag Link Tue Feb 2, 2010
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