I want to househack but San Diego is too expensive... what to do?

Question

Hi, I want to do house hacking but my job is in San Diego. It's just me and my husband, so we can afford to live in a one bed room and rent out the other rooms, whether it's in the form of attached ADU or multi family house. But the problem is it's so expensive in San Diego that the extra rent does not cover mortgage after my share of rent. For example, I am willing to pay ~3500 in rent but monthly payment turns out to be close to $8000. I am not necessarily looking for cash flow, I want longer term appreciation, but still not sure if it's worth paying more than what I would have renting. There's another area, outside California where I can invest with little cash flow with some appreciation expectation. Should I still do house hacking? Is paying more for mortgage worth it?

Russell Brazil · Answer

San Diego is too expensive not to househack, not the other way around.

Keith Mintz · Answer

I specialize in Co-living and house hacking! It is possible to do. You want to look for homes a bit more inland (college area, normal heights area, Escondido, lemon grove) there are some areas like these that you can find prices that you can make work to house hack.

Ideally you want to find homes with as many bedrooms as possible, detached garage, and enough land space to either add rooms or build another ADU. There more rooms and space, the more opportunity to rent the other rooms out. You can do LTR furnished room rentals which you can get $1300-$1500/m per room depending size and location. Or rent out the rooms MTR or STR which typically will produce closer to $2k+/room. With a 4 or 5 bed home or maybe a duplex... You may be able to cover your costs.

Feel free to message me if you need any help with analyzing.

Robert Comstock · Answer

You and your husband need to have a sit down discussion about what's important to you and what sacrifices your willing to make to get it.  Which I dont see above.  If you trying to build semi-passive income there are easier markets, if your trying to end up with a house in San Diego to live in and raise a family, etc, etc, etc, then house hacking may be your best bet.  You need to be clear on the goal before figuring out the strategy.

Kenneth Donaghy · Answer

HouseHacking here in San Diego is a great opportunity. A large percentage of my business as a realtor in San Diego is helping people Househack, many of those reach out to me via BiggerPockets. Many of my clients have now househack multiple properties. Depending the what loan amount your qualify for and the location of your property will determine how soon you will be able to be in a position where your tenants cover all your mortgages. For most of my clients and myself this happens on the second property.

Steve Vaughan · Answer

We bought ours from a motivated seller evicting their attached 'neighbor'.    I went to the courthouse to find unlawful detainer actions. You can probably search these online now.

Do the work to find motivated sellers off market if you have to.   Or search for long DOM, vacant, etc on the MLS.

Househacking isn't comfortable,  but either is paying $3500 rent forever.  Do some digging 👍

Twana Rasoul · Answer

I can show you dozens of great examples of others who have house hacked here successfully for the past few years and including a few that are in contract to do so as we speak, all here in San Diego.

As interest rates climb it becomes more and more difficult to make it work but a little bit of willingness to put in some work and creativity on the right property can make for a great house hack.

Dan H. · Answer

Most properties in virtually all large cities have negative cash flow at high LTV.  This implies you need to find the exception, put in work, make sacrifices, etc. if you do not desire negative cash flow

If you purchase a 2 unit property and rent one out and rent out spare BRs in the unit you occupy you should be able to avoid negative cash flow.  If you can self manage the second unit as an STR, you could have some cash flow. Note managing is work, managing STEs is more work, and managing by the room is also more work.

It takes work or luck to get cash flow in this RE market.  But with time, virtually all RE purchases look outstanding.

Good luck

Bradley Buxton · Answer

Do you have you have to stay in SD?

What other areas have you considered?

Dylan DeBellis · Answer

Are you heavy in liquate? or are monthly payments the best option for you? If you have access to liquate funds or private money loans maybe try investing outside of your market? ("Live where you want..invest where it makes money") I currently invest in the Savannah Ga market (a lot of great things happening to that economy) and don't live in that state

i'd love to connect if you have any questions or just want to conversate.

Bora Moon · Answer

I haven't thought that way but yeah make sense!

I want to househack but San Diego is too expensive... what to do?

Most Popular Reply