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  #1  
Old 09-09-2011, 02:28 PM
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Thoughts on San Diego County investment property

If I stay in the US, which is far from certain, I'd be looking to start a property investment business somewhere in the US within the next year. I've been to the San Diego area quite a bit in the past two years, have friends out there, and like the business conditions there. Economy seems to be doing OK over there for those that are employable (i.e. all friends in tech fields that need work have it) but property appears to still be reasonably cheap -- i.e. you can pick up a halfway decent multi-family at a cap rate between 7.5 and 9%. Plus SD county doesn't have rent control/stabilization ordinances like many other parts of CA.

Yeah, there's also Phoenix which is dirt cheap, but I have no love for the place, whereas I actually like the SD area. Tucson may be another option. As well as NJ, but I'm somewhat afflicted with wanderlust, and would like to incorporate that into my business affairs. NJ/NYC area is also bad because the foreclosure/short-sale crisis has somewhat shaken itself out in the West, whereas there are a hell of a lot of overhanging properties in NJ, and they're only trickling onto the market very slowly. But with recent court decisions designed to "unclog the pipe", there may be a deluge in the next few years, so it doesn't feel like the right time to buy here. (Other than NYC, which is pretty stable in value if it hasn't risen slightly, but NYC cap rates range from about 3 to 6%, which makes it a zero-sum proposition if you're using leverage.)

Thoughts or opinions?

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Old 09-09-2011, 02:34 PM
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nice area, but Ive never heard "cheap" and "property" in the same sentence describing the San Diego area. from what ive seen it is still out of reach of anyone not already there, who doesnt have a million in the bank, or doesnt need to have a mortgage payment that is covered by the availble salary base.
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Old 09-09-2011, 02:37 PM
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Quote:
Originally Posted by lutzTD View Post
nice area, but Ive never heard "cheap" and "property" in the same sentence describing the San Diego area. from what ive seen it is still out of reach of anyone not already there, who doesnt have a million in the bank, or doesnt need to have a mortgage payment that is covered by the availble salary base.
Prices (from what I've looked at) are broadly comparable to those in NJ, which is also an expensive market, but far from impossible to play in if you're entering with some skin in the game.
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Old 09-09-2011, 02:42 PM
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San Diego COUNTY is pretty large.

The City itself and some of the coastal areas, like Encinitas (which I am thinking of going to myself and have looked at rresidences and gated communities there a couple of months ago) have wonderful year round climate and ambiance.

And not too far away from the W Side of Los Angeles and ther coastal Orange ounty areas like Laguna Beach and so forth, which I like a lot. (Las Brisas by the ocean in Laguna is paradise btw)


But inland SD county, like Temecula's wine country might be worth considering.

My next door neighbors are from Fallbrook, which is real country near there, and they loved it but came up her to be near to their children.

I'd be careful with large apartment buildijgs, just ONE lousy renter can REALLY give headaches, and many of them are renters for a GOOD reason.

Perhaps a credit worthy renter to live in a duplex where YOU reside in the pther half might be worth thinking about.

If you are really bold and audacious you could get soe deals in San Ysidro or National City I guess bu it would help if you are fluent in Spanish.

That far south in SD County though the beaches are not so enjoyable because excess sewage from Tijuana Mexico washes up on them/
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Old 09-09-2011, 02:44 PM
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Originally Posted by spdrun View Post
Prices (from what I've looked at) are broadly comparable to those in NJ, which is also an expensive market, but far from impossible to play in if you're entering with some skin in the game.

understood, but I couldnt even rent there with thier salary base, there is too much disparity for my comfort. It seems like you would get a lot of in for 3 and out renters. or 6 guys staying in a 1 bedroom.
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Old 09-09-2011, 05:06 PM
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Originally Posted by Jim B. View Post
San Diego COUNTY is pretty large.
I'm aware of that, and am actually looking in multiple locations within the county.

Quote:
But inland SD county, like Temecula's wine country might be worth considering.
Are there enough jobs that far inland to support renters? I've driven through Temecula area -- seemed like a bit of a nowheresville to me.

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My next door neighbors are from Fallbrook, which is real country near there, and they loved it but came up her to be near to their children.
Fallbrook and even the better parts of Oceanside are interesting, assuming that either military funding continues as is, or other bases that are closing get consolidated into Pendleton.

Quote:
I'd be careful with large apartment buildijgs, just ONE lousy renter can REALLY give headaches, and many of them are renters for a GOOD reason ... Perhaps a credit worthy renter to live in a duplex where YOU reside in the pther half might be worth thinking about.
I'm actually either looking at condos or looking at "commercial" properties. Meaning 5+ fam (probably 5 or 6) or fewer families but with a commercial space. It's easier to get financing on those than on a straight 2 to 4-plex, since banks look primarily at your credit and the income from the property, rather than treating it as an extra home.

Quote:
If you are really bold and audacious you could get soe deals in San Ysidro or National City I guess bu it would help if you are fluent in Spanish.
Yep. What do you think of Chula Vista, Imperial Beach, or Escondido, BTW? (Know they're sort of on opposite ends of the county, but anyway.)

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That far south in SD County though the beaches are not so enjoyable because excess sewage from Tijuana Mexico washes up on them/
Saw that in I.B.

Last edited by spdrun; 09-09-2011 at 05:22 PM.
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Old 09-09-2011, 05:08 PM
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Originally Posted by lutzTD View Post
understood, but I couldnt even rent there with thier salary base, there is too much disparity for my comfort. It seems like you would get a lot of in for 3 and out renters. or 6 guys staying in a 1 bedroom.
You have to look at the individual building, rents/incomes in an area, and purchase price, rather than averages for the county, which can be really deceptive. I.e. if you look at the numbers for the of Manhattan, you'd think that you couldn't rent a 2 bedroom in Manhattan for under $3500/mo, which isn't of course true.
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Old 09-09-2011, 05:14 PM
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Also, if anyone feels like chiming in about Phoenix or Tucson, feel free to. I have friends in North Phoenix (still inside the peripheral highway), reasonably good neighborhood, and I see single families in their area going for $75-80k, condos going for $40-50k. Someone on here mentioned that their friend was buying condos in Phx for rental purposes -- interesting to me as a business proposition, though I have no strong attraction for that city. (Some of the small towns to the north in the hills are beautiful, though.)

I'm concerned about AZ's long-term future though. Poor schools, lots of crazies involved in politics, there's the water issue, and it's already 105+F in Phoenix in summer. How will this get worse with global warming?

I suppose I could buy, take profits in short term, and then plan to sell in 3-5 years, but who knows where prices will be then.
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Old 09-09-2011, 06:23 PM
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If your not going to live next to it, and run it yourself, you will need to buy a lot of units to make paying for management work. You may want to consider buildings with on site management already in place.

How many units are you planning on buying?

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