San Diego & Inland Empire Market!

[Kendall Smith]

How's the market in San Diego/Inland Empire? Anybody who would like to connect/network together? Any suggestions for title companies? Thank you. Peace & Love!!!

[Dan H.]

Originally posted by @Stacie Lynn:

@Dan Heuschele so would you recommend purchasing RE in cheaper areas such as Inland Empire?

I do not know much about Inland Empire RE investing.  I therefore do not endorse or recommend against investing in the Inland Empire.  What I suspect is that there are routes to being successful investing in Inland Empire RE but I suspect it is not simply by investing in the cheap area and obtaining cash flow profits that would provide significant positive impact to a coastal So Cal investor finances (I do not see this path leading to financial independence unless you can be financially independent on a very small amount of money).

I believe investing in san Diego can be profitable but it requires some effort to identify the correct purchase.  The easiest correct purchase is one that has a value add and will be cash flow positive after the value add. 

Identify the property that meets the above criteria then BRRRR it. We have never gotten out all of our investment without an assist from market appreciation. Without the assist from market appreciation, we are typically still into the property between $20K and $30K after the refinance. But we are now cash flow positive even if it is fairly small compared to the equity position but I prefer to look at it with what is the cash flow with respect to the investment which is typically OK. So $100/month positive after all expenses including allocating for realistic maintenance, vacancy, cap ex, miscellaneous on a $20K investment is OK but nothing to brag about. But 1) this is the initial cash flow 2) this is after significantly increasing our equity position via the value add (usually $40K to $100K).

So the initial cash flow is OK but not great. However, in San Diego the average rent on a SFR has increased more than $100 annually for at least the last 4 years. So the $100/month cash flow from 3 years ago is now ~$400/month. That starts to look like a great on-going return on the investment (versus the value add provided a one-time return on the investment).

BTW I am not saying it is easy finding the property that meets that criteria but I will say I see them somewhat regular so it is also a lot easier than winning the lottery.

Good luck