Is 420K & a FHA Loan enough in San Diego?

[Ryan Knapp]

Hey BP, 

My wife and I are in the process of looking for a home to house-hack in San Diego. We'd like to buy SF then create a JADU. We've been approved for a FHA loan for 420k and also down payment and closing cost assistance.

I grew up in San Diego and read 10-15 real estate books as we've been in the process. I grew up in and understand the area and while I don't know much think I have a solid start. 

Most of what we've looked at end up selling for more than listing price it seems like right now. Like people are so frantic they just scoop up the houses even if they have to take an L. We're looking in areas primarily in East County - La Mesa (we wish), Spring Valley, El Cajon, Lakeside, Lemon Grove, and Santee. Are there other central/eastern areas we should be considering?

We're willing to Grant Cardone 10x the situation but my questions is if we even have enough to get into the market? Don't get me wrong, we're willing to keep charging, but wondering if anyone else has recently acquired deals in this price point? Or, anyone who's been able to acquire something that was listed higher and get the price down?

We're connected to the MLS, and check real estate apps obsessively. Is the market just to over-heated right now for us to get into? Are there creative strategies we're not considering that will work with our loan?

Appreciate your thoughts 

[Dan H.]

Have your agent run a list of homes in the area you are interested in that have closed at less than $450k.  Then drive by 10 to 12 of these homes. 

If any one of them could work for you then is is possible.  However if all of then end up not meeting you minimum requirements you may need to save more before starting your plan.  I suspect you may be required to make some compromises but the exercise will be enlightening. 

As for the plan, I think the verdict is still out on the JADU value in areas you described.  

Good luck