I own 3 condos in SD (92108) and looking at 2 more. Rates are so low I can finance cash neutral deals. Is this good idea in current SD market ?

Asked by Tony, 92108 Sat Oct 1, 2011

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Derek Rotzinger’s answer
Derek Rotzin…, , San Diego, CA
Wed Sep 5, 2012
Diversifying is great, but what else will give you returns like real estate will right now?? If you can find a property that works on paper and you can comfortably afford it, BUY! You will be kicking yourself in 10 years if not.
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Laura Kelley, , San Diego, CA
Fri Jul 20, 2012
I agree With Cindy.

Although I have sold to many investors in Mission Valley. There are deals in other areas. You may want to try diversifying your portfolio. UTC, College Area, or even Pacific Beach are popular areas.

Search Here: http://www.LauraSanDiego.com
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Robert Chome…, , San Diego, CA
Fri Mar 30, 2012
I would not personally buy an investment property today unless you have $200-$300+ clear NET positive cash flow per month (after PITI+ hoa+ a % for vacancy/repairs). Don't you want to be paid for all the pain in the butt and risk of owning and managing rental properties? You have to be even more careful with the numbers on condos, because HOA dues can easily rise by $100+ in a year seriously eating into your cash flow. And a $5k special assessment could kill a few years of cash flow. Water bills are so high on condo complex's that they are really driving up hoa costs.

In this market I would not rely on a break-even rental property hoping your gains & return come from appreciation. From 2001-2007 the big appreciation was pushed up by easy financing. We are not going to have that tailwind this time. This time prices are going to have to rise based on local earned incomes rising & job growth, not creative financing.

Also to cash out on appreciation you have to pay tons of costs. When you sell have depreciation recapture, cap gains tax, closing costs, state taxes, Realtor commission, fix up costs... leaving you with about 60 cents on the dollar of that appreciation. Make sure the investment is worth your har earned capital and time.
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Cindy Davis, Agent, San Diego, CA
Fri Mar 30, 2012
Good for you for being so industrious! It is a great time to buy. That said, I would encourage you to diversify your neighborhood. I also own in Mission Valley, but consider diversifying your portfolio. UTC, College Area, North Park, and Hillcrest are popular rental areas.
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Rachel LaMar,…, Agent, Carlsbad, CA
Fri Oct 7, 2011
Hi Tony,

i do not know what your future plans are with these properties, but if you plan on holding onto them for a long time I think now is a great time to buy. I have multiple investor clients - two are in the process of buying condo number 3, one is looking for a second condo, and the others are looking for their first investment property. Those who purchased already have purchased short sales, got great deals, and have been able to rent them quickly.

From what is happening out there with the low interest rates, distressed inventory and great negotiating, my investors have been very happy. You have to evaluate your long term goals and make that decision, but judging from my experience with investor buyers, now is a great time to purchase income property. I would recommend discussing your plans with your accountant and financial planner.

Best of luck to you,

Rachel LaMar, J.D.
LaMar Real Estate, Inc.
0 votes
Greg Von Her…, Agent, La Jolla, CA
Sun Oct 2, 2011
It depends on why you're buying them. If it's for appreciation then don't do it. If it's for making money monthly then it doesn't even do that for you either. Doesn't seem like very good investments right now unless rents were to rise dramatically in the near future.
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Abu Musa, Agent, New York, NY
Sat Oct 1, 2011
I would buy as many as I can in USA . Because this is the best time to buy.Good luck.
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