All Forum Posts by: Emy Bernardo

I don't know how many units your property is, but $17,000 sounds like a great return to me and that type of cash flow would not make me want to sell. That said, 1 million quite a bit of equity to be sitting idle. With interest rates are on the rise, it might not make sense, but if the numbers worked, a cash out refi or a heloc might be a way to take out some of the equity and purchase more properties in another market. Or, maybe look into adding an ADU or JR ADU to your existing rental in San Diego to generate more cash flow..

@Michael Lee  - in 2019 AB 1482 essentially implemented rent control and just cause eviction laws for certain types of property statewide in CA.  Unless the property is in an exempt category, you can only evict for "just cause" and specific "at fault" reasons.  Also, rent increases were capped at 5% plus CPI - max 10%..  Local jurisdictions can and have implemented tighter controls, esp. during the pandemic.  

Price point is around 800k and up depending on the area.  You may be able to find something for less. Everything is extremely competitive in San Diego but 100% tenant occupied that need a lot of work may stay on the market longer.  You could try cash for keys as an incentive (on top of the 1 month rent that is already required) or if you plan to do a major rehab (one of the allowable "just causes" for eviction) and have it vacant, you could offer the tenant the first chance to rent it back - at the new and improved price, of course.   I took another read through the Rent Cap and Just cause addendum form and I noticed that if you are using one side of a duplex as your primary residence at the time a tenant enters into a new lease on the other unit, you are actually exempt from the law.. That could be a benefit for you.. Here's a good FAQ on the RCJC on CAR - you may have already seen.. https://www.car.org/riskmanagement/qa/landlord-tenant-folder/Rent-Cap-and-Just-Cause-Eviction-Law---Rent-Control---AB-1482#V.#V.##

I'm not sure the numbers would work in Borrego as I have considered investing there myself and have staycationed there quite a bit. I love the place and don't mind the heat.  That said, it's pretty much a ghost town in the summer.  I would imagine the rentals would be very seasonal there.  Be sure to check the flood zone, surprisingly most of the southern part of town is in a flood zone.. It would be a popular place for a winter season snow bird rental, just not sure that it would be very consistent income in the summer.

@Brian Hager  I will message you a lender contact that might be able to assist. 

I would also double check to see if any state or local rent caps and eviction laws apply.  California has a statewide rent control and just cause eviction law and many local jurisdictions implemented even stricter eviction laws during the pandemic.  

@Wai Chan if you are renting single family or condos in CA - be mindful that these properties are exempt from the law but ONLY if the tenant signs the rent cap form.. It's a little gotcha that many landlords and tenants might not be aware of...  Here's an interesting map that shows which states have rent control.  

https://www.nmhc.org/research-...

@Wai Chan   - Unfortunately, agents in California have to join the local board, CAR, and NAR.  The costs add up.  In addition, there is a quarterly MLS ($159)and annual Sentri Key fee.   You need access to the MLS so you can see the agent only remarks, showing information,  list properties, use "Zip Forms" transaction management to have access to all of the CAR forms so you can conduct transactions/e-signature, etc.  If you don't like using Paragon for search, I highly recommend Homesnap - there is a  desktop version and mobile app..  There are also a lot of good tools you will gain access to for getting mailing lists, CMAs, tax information, market information, legal information. These tools can help you find investment properties. You will be able to deduct these costs once you start showing income, so keep track of your expenses. CAR members have free access to an income/expense tracking program called Hurdlr that is valuable.   I suggest giving SDAR a call to verify all of these costs.  I attached a breakdown of the annual dues (not including MLS or Sentri)..

@Sarah Enero - it's a good dilemma to have - you have options! That said, are you expecting to cash flow $2000 a month or a year off the STR? What city are you looking at for a STR? Keep in mind that 2nd home loans are going to have a hefty fee added to them starting April 1st of this year. Please view this article I wrote about the new fee here: https://emilybernardo.exprealt... No one has a crystal ball to know what housing prices are going to do here in San Diego over the next 5 years, but I think it's safe to say that interest rates are going to go up. That could make getting a HELOC risky and if the market softens of the next 5 years and you buy now at the top, you aren't going to have any equity to take out.

IMO, instead of the STR option, I would look at investing into a turn key rental in a less expensive and more stable market. The mid-west (ex. Ohio) has stable rental markets w/o the huge price fluctuations we have here on the west cost. You can cash flow a couple hundred a month and have a property management team that will take the hassle out of being a landlord. Plus, you will get all the tax benefits of owning real estate.

Cash flowing in San Diego is a long term proposition unless you have a lot of capital upfront to force equity through adding an ADU or doing a rehab. If you aren't opposed to having a roommate, you could look for a 2 bedroom here and rent out a room to help cover your mortgage. You can even rent rooms out to travel nurses - they are gone all the time and usually take assignments from 30-90 days.

@Robert Leitner  I'm not sure if I'm allowed to post this but I'll try again.  
https://tinyurl.com/y9kb3er5