Real Estate Agent · Austin, TX · Member since 2018 · 29 posts · 4 votes
Hi guys so I’m thinking about buying this property to live in and have as an investment in the future. It’s a 4 bedroom 3 bath 2600 sqft House. The seller is asking 600-620k for it. Which I think is a good deal for San Diego and with the same specs on houses in the area. It’s been on the market for 65 days and his original asking price was 689k do you think this is a good deal or no,
Yes so my realtor did as much comps as he could and came to a conclusion it was in the price range of 595$ to 615$. And I would live in this property for at least a year and would like it to be a rental property.
SFR purchased at retail in San Diego have negative cash flow as a rental. The realtor provided a retail price range that aligns with the asking price so it is not appreciably below retail purchase. So I would think this is only an acceptable investment property if you either have a value add (you did not indicate a value add), are very confident of market appreciation (I am not at this point), or are vary confident of rent appreciation.
I would not purchase it as a potential rental. I think you could do better.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
8y
Have your realtor run comps for you. They get paid to do these things. My mortgage broker uses a tool that automatically provides a list of comps. The list is not perfect so it still requires a little human interaction but it is very easy. Your realtor may have access to the same or similar tool.
Many things go into determining value such as location, condition, quality, schools, modern (open floor plans), size of lot, etc.
Note if you are getting conventional financing, an appraisal will be required. This prevents purchases at significantly over value. However, by the time the appraisal is released the buyer is typically into the property for at least a few hundred dollars.
Real Estate Agent · San Diego, CA · Member since 2016 · 52 posts · 29 votes
8y
I second all of what @Dan H. said. San Diego is not all the same so it's hard to determine value based upon just a price & size. Also, your realtor should definitely be helping you to comp on this particular property. If you need help in that department, please don't hesitate to send me a PM.
Lender · San Diego, CA · Member since 2012 · 54 posts · 34 votes
8y
List price doesn't necessarily have any bearing on value. A 10% drop in price is enormous so the seller already knew he is overpriced. As noted above, comps are the key. Zillow isn't the best but if you're in a conforming neighborhood a Zillow valuation would be a decent gauge before initiating a real estate agent to work on your behalf.
Hi guys so I’m thinking about buying this property to live in and have as an investment in the future. It’s a 4 bedroom 3 bath 2600 sqft House. The seller is asking 600-620k for it. Which I think is a good deal for San Diego and with the same specs on houses in the area. It’s been on the market for 65 days and his original asking price was 689k do you think this is a good deal or no,
You need to provide WAY more info (I don't think anyone here is going to jack your deal). That's not a "good deal for San Diego" as it depends on where. If in La Jolla yea, if in the sticks, maybe not. And then what are you going to do with it? You need to rent it for $6k/month to actually make a good return or maybe $4.5k **MINIMUM** to have it close to break even.
Hi guys so I’m thinking about buying this property to live in and have as an investment in the future. It’s a 4 bedroom 3 bath 2600 sqft House. The seller is asking 600-620k for it. Which I think is a good deal for San Diego and with the same specs on houses in the area. It’s been on the market for 65 days and his original asking price was 689k do you think this is a good deal or no,
Oh, and as smarter people than me have said, a price drop means zero. A guy across from me overpaid for a fixer upper ($1.3m). It was worth maybe $800k. he put $500k into it. He listed it for $2m about 7 months ago. They've dropped the price by $10k-$20k almost every week (I think they're at $1.8m now?). ANyway, it needs to drop another 25-30% to be even remotely worth buying. So if they dropped it 10% it would still be a terrible deal.
Hi guys so I’m thinking about buying this property to live in and have as an investment in the future. It’s a 4 bedroom 3 bath 2600 sqft House. The seller is asking 600-620k for it. Which I think is a good deal for San Diego and with the same specs on houses in the area. It’s been on the market for 65 days and his original asking price was 689k do you think this is a good deal or no,
"...as an investment in the future." Can you articulate what sort of scenario you're expecting that would make this a good investment? Meaning, what would have to happen for this to be a good investment (or, what could happen that would make it a bad one)? You've got an implicit hypothesis in your head - it's very helpful to write that down.
Real Estate Agent · Austin, TX · Member since 2018 · 29 posts · 4 votes
8y
Yes so my realtor did as much comps as he could and came to a conclusion it was in the price range of 595$ to 615$. And I would live in this property for at least a year and would like it to be a rental property.
Yes so my realtor did as much comps as he could and came to a conclusion it was in the price range of 595$ to 615$. And I would live in this property for at least a year and would like it to be a rental property.
SFR purchased at retail in San Diego have negative cash flow as a rental. The realtor provided a retail price range that aligns with the asking price so it is not appreciably below retail purchase. So I would think this is only an acceptable investment property if you either have a value add (you did not indicate a value add), are very confident of market appreciation (I am not at this point), or are vary confident of rent appreciation.
I would not purchase it as a potential rental. I think you could do better.
Investor · San Diego, CA · Member since 2015 · 290 posts · 80 votes
8y
Run realistic numbers and see if you cash flow/hit your target ROI or cash on cash return. Chances are you won't; which is fine since the best investment is the one you didn't make (Warren Buffett quote). SFR's in San Diego are tough to justify purchasing as an investment property with the overpriced market. I'd still recommend seeing the property so you can confirm you made the right decision in passing and to become familiar with your investment criteria. Good luck.