I have been a resident of Denver, CO for 10 years and am hoping to relocate to San Diego, CA within the next 2 years. I am currently saving up additional down payment funds to buy a long-term home in San Diego (your housing prices are crazy). Prior to deciding that I want to relocate myself and my family to San Diego, I was looking for a multi-family investment property in the Denver area. I was targeting 4-unit and 4+ units (commercial). The plan was to buy the property and pay for a management company. I know the area pretty well and also have a good idea of what properties I'm interested in. I have $500k that I'd like to deploy from the sale of single family rental that I sold this past year.

Now that my family and I are set on relocating, I'm trying to figure out where I should buy the property. All I know about San Diego real estate investing at this point that you have much higher prices and some unfavorable laws for landlords. We have visited a lot and I have basic ideas of what different areas and neighborhoods are like. One tempting option I have in mind is to use the funds to buy and live (with my family) in a multi-family in San Diego. This would allow us to move sooner and we could get to know what areas that we like to buy our personal home in the future. Financially it also works out very well. We already have a "long-term" home in Denver and I could never convince my wife to do this in Denver at this point. In the context of a move to San Diego, it makes sense. After a year or so, we could then find our long-term home, move out, and fully rent the units. The other option that I'm considering (if owning rental properties is much less favorable in San Diego), is to buy my investment property in Denver and find a good management company. Then move to San Diego in a year or two and deal with management and decisions while I'm out-of-state.

I think I have a decent grasp on how cap rates will differ between Denver and San Diego and the implications of this on my down payment and cashflow potential. I assume I will be relying a bit more on appreciation in San Diego. I'm mainly looking for a gut check on the 2 options listed above. In addition, I'd like to find out if there are favorable strategies for investing in San Diego RE and what laws and regulation I should be aware of before considering entering the market.

San Diego, California

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