Starting Out in an Expensive Market

[Gary L.]

I'm just starting out buying rental properties but live in a very expensive market (San Diego). The average SFH is approximately 650K. How do you purchase cash flow positive rental properties in an expensive market without putting down a huge down payment?

[Maxwell Ventura]

@Gary L.

As an investor, it would behoove you to avoid coming in w/ 20-25% in San Diego if you can. Owner occupancy w/ little money down should yield a great return on your investment. 

With that being said, if you don't plan on occupying and if you have to come in w/20-25% down, know that cash flow is good in San Diego. Just not INITIAL cash flow.

We're sitting at 12% median sales price increase right now (year over year). Over the last decade we've consistently been around 5% - 5.5% increase annually. 

And, increases in rents will (and have) parallel an appreciating market. 

Lastly, San Diego's diverse economy is set to boom over the next decade. Along w/ the military (essentially recession proof) and our tourism, Biotech & our downtown is set to explode via numerous development projects. Should be a great (and safe) 5-10 year play. 

Hope this helps.