All Forum Posts by: Chris Vicari

@Ryan Phillips Shawn was correct it's up the hill but still very close. I'll let you know about that beer I do have a kegerator. 

@Bruce May I think it's a stretch for me on my own based on my income. I have enough to place a sizable down payment (15%) contingent upon the sale of my current property but I would be more comfortable bringing in a partner at the 40-50% on the REIT and either figure out an agreement to share the main house on the property or cohabitation for the 6 months a year I'm actually in San Diego.

@Andrew Johnson Yeah I'm currently talking with TurnkeyVR and I'll be getting with Vacasa Rentals during the week. The thought of someone drunk or a child destroying themselves on that water feature has me seriously reconsidering. I still think the price is low might have to go with a co-ownership option to get in and use my surplus cash to get in a more stable short-term rental with less hazards and risk. 

I have my PM friend pulling comps with actuals to see where we fall. I'll get you updates from what I discover soon. 

@Andrew Johnson

Fantastic observations there. I had taken them into consideration and understand that the place would attract the party crowd. Additionally, the water feature has definitely hurt their resale as awesome as it is. I think I'm picking up on a hard truth here that this place isn't viable as a short-term rental. High end, pre-screened clients to rent for the 2 month increments that I'm not in town could be viable and a 12 month renter in the casita. Perhaps as a venue space though if zoning allows I'll do the research. I was going to to with restoration hardware for the furniture and get waterproof options on the ground floor next to the pool. 

If I rule out the vacation rentals, I could swing a 50/50 co-ownership agreement but there goes the revenue and now we're just speculating on if we can sell for a high. Lot's to think about and thank you for the sage advice!

@Thomas S. You're exactly right. I am prepared to live in the casita and rent out the main property in the event the short-term market falls through but at this point it's speculation. If the rental market proves to be viable enough to support this idea I would want to duplicate it on diversified property types and locations. 

@Fabio Salas I take your advice very seriously. Impartiality is the whole reason why I started on BP and gaining new perspectives. I appreciate your feedback sir and thank you for your service. 

@Joseph Gallant Thank you for the thorough reply! I definitely have to proceed with caution because I'm reacting to something that I want personally as well which may not be the best financial decision. I've structured in the costs of a vacation rental property management company (16% first year, 18% every following year) that provides 24/hr guest services, advertising on all the major vacation rental websites as well as marketing, administrative and accounting process. I think it's well worth the money and virtually removes coordinating responsibility from me initially until I can assess how the rental income is going. 

I agree a co-investor would be the best strategy, but the right one is hard to find and I'm on the backside of timing right now. I wouldn't necessarily want to enter a partnership with anyone really but most hard money lenders are not interested in a 3 year, simple annual interest deal, so it may take the right investor. 

As far as exit strategy is concerned, I guess that would be a good thing to add to my original post. I have to put money from the sale of my current property down on my primary residence to avoid paying a hefty capital gains penalty. I figure I need to have a residence as my primary domicile for 2 years to avoid that penalty. Ultimately, I want to sell the property 3-5 years out speculating that 1) I'll break even on costs/earnings from renting the place and 2) I can make improvements and demonstrate an established business model to then sell the property for significantly more than the purchase price. 

There's also the likelihood of falling victim to "newly single after 8 years-itis" and I want to make the bold move I've always wanted to make but have been too conservative to make before. Again, appreciate the input Joe!

Hey Christopher I had an additional thought. It seems like that you have extra space in the back of your property have you thought about seeking additional vehicle storage options back there? Perhaps adding a privacy gate and security cameras to justify bumping up what you charge them? It seems like an amazing opportunity for expansion. 

Welcome Chez! Have you thought about short-term vacation rental options? I'm in a similar situation as you but down in San Diego. Great timing to find this site and I'm very thankful for it. 

First and foremost, hello and thank you members of the BiggerPockets community! I'm a native of San Diego and have been watching the vacation rental market for years and am finally in a place where I want to start wealth-building. I'm looking to connect with other coastal Californians who are in the business and learn from their experiences and share mine as well. 

I'm a veteran pilot who currently works overseas about half of the year. I'd like to make enough money in vacation rentals where I can work less and enjoy my life more! Thanks in advance. 

-Chris

The Basics: I've been watching the micro-climate that is San Diego's short-term vacation rental market since I moved there in 2015. I have numerous friends who rent out their primary residence and completely cover their annual costs through rental income. My work is entirely overseas for about 190 days a year. 

The Property: San Diego, 1.5 miles from Ocean Beach, established neighborhood. 3bed/3bath with detached casita income property, ~3900 square feet on 9,000 square foot lot, waterfall and pool as central feature inside primary residence, very high end finishes and priced at 1.45M, almost $200-300 less per square foot than any near comps. The ultimate bachelor pad. 

Finances: 30 y/o (newly) single male, owned 2 houses, 750 FICO, $150k cash, $100k in 401k/IRA. $170k annual gross in income and $12k annually from the VA, with no debt or payments to the ex.

The 1.5 Million Dollar Question(s): 

• Is it reasonable to expect I can cover costs and perhaps even generate a profit by renting out my home and the casita when I'm away and staying in the casita part time when I am stateside to justify such an expense? 
• Hard Money Lenders, Traditional/VA Jumbo Loan, or find a business partner that wants to invest and potentially live there with me?
• How would you go about securing financing for this?

I'm a long time reader and a first time poster, I've ran the rental calculator and determined that my costs would be around $120k annually all-in. I can't cover that without rental income but due to the uniqueness of the property, I believe I can get 60% or higher occupancy rates for a median rate of $700-900/night annually, with outliers north of $3,000/night during holidays and major events. I am aware that San Diego may vote eventually to ban rentals less than 30 days. 

I believe the property isn't set up well for families and is more closer to the playboy mansion than a traditional family home. Also, it appears to be listed grossly under market but it's difficult to comp. My house down the street is being listed at $550/sq ft and isn't even close to as awesome as this place. 

Talk me out of this, or into this. I can only see the upside in this, am I wrong here?