All Forum Posts by: Dan H.

Quote from @Brian Larson:

Quote from @Dan H.:

Quote from @Bradley Buxton:

@Adam Watanabe

Converting a garage is not the best idea for the exit of a property. Many people still want garages for primary residences. By having a garage converted, you limit the value of the home and the buyer pool to investors. At 120k/2k that is 60 months or 5 years on the return. @Dan H. has some good insights on ADU conversions.
Generally, it would be better to put the $120k towards the down payment of another property so you can gain the equity even if the cashflow is breakeven. 

thanks for the tag.   To the OP, I regularly check ADU addition underwriting.  I encourage accurate and conservative underwriting.  On an ADU addition, the most important aspect of the underwriting is to KNOW the value that will be added by the ADU.  In the absence of sufficiently comps, expect a very poor valuation.  

I suspect the cost to convert an 450' garage to an ADU will approach $150k. The issue is it will likely add ~$75k of value resulting in an initial negative $75k (a value subtract). This initial negative position needs to be recovered before any cash flow is obtained.

I am also a bit skeptical that a 450’ unit can achieve $2k rent in Sacramento.

Using 50% rule (expenses other than mortgage is 50%) on a financed ADU, 8% 30 your loan at 80% LTV.

$2000 - $1000 (50% rule) - $881 (P&i) = $119/month
$75k/$119 = 630 months to recover the initial negative equity. This is 52.5 years.

Let’s use OP’s $120k with $45k initial negative position.
$2000 - $1000 - $704 (P&i) = $296/ month
$45k/$296 = 152 months or 12,7 years to recover the initial equity.

Building a single smal, unit is very expensive development.

Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:
1) The value added by the ADU addition is often significantly less than the cost of adding the ADU. Search the BP for ADU appraisals to encounter numerous examples. This creates a negative initial position. This negative position can consume years of cash flow to recover. Make sure you know the value the ADU will add to the property before building the ADU.
2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged by the ADU (HELOC, cash out refi, etc). Leverage magnifies return.
3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR. However if I do a BRRRR I can achieve infinite return by extracting all of my investment. Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).
4) Adding an ADU is a slow process. It can take a year or more to complete an ADU. During this time you are not generating any return from the money invested in the ADU. This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return.
5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.
6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties. This may affect value or time required to sell.
7) Adding an ADU does not make the property a duplex. For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy). Duplex have different zoning that may permit additional units. Duplex can always add additional units via the ADU laws.
8) Related to number 1, purchasing a property with an existing ADU is cheaper than buying a property and adding an ADU. Why add an ADU if it can be purchased cheaper?
9) adding multiple ADUs or adding an ADU to a quad looses F/F conventional financing. This reduces exit options and affects the value.
10) Small number of small units is the most expensive residential development there is. This implies residential units can be built at lower costs and provide better return than building a single ADU.
11) adding an ADU to SFH can make the SFH fall under rent control. In CA currently only MF properties are rent controlled. If the house is older than 15 years old and an ADU is added, it can become rent controlled. Rent control laws are market specific. Make sure you know the impact that adding an ADU will have on any rent control.
12) investors seldom include the land value in the overall ADU costs. The reality is the land has value.

Good luck

 Wow @Dan H. this is a crazy story.  I had no idea that someone could even do this.

In San Diego, there is starting to be legit push back to these types of developments but the state has mandated affordable housing quotas. The jurisdictions need to comply to these requirements. Their solution of discarding the zoning rules for a commitment of low cost units is a poor solution. It would be better if they mandated new development to provide low cost units at part of the approval process but this has issues when the development as proposed meets the current rules. But they change the rules (increasing allowed density) for affordable ADU units added. I see little difference in changing rules in the new development except new developers likely have more resources to fight the rule change.

If you believe affordable housing should be provided in all areas, the solutions are not trivial. So we end up with 18 units (17 ADU units plus the original unit) on a lot that was zoned for a single family home (by the way single family zoning no longer exists in CA).

Note, I am not claiming there are easy solutions to the housing crisis.  I do claim the existing solutions seem extreme especially if it happens next door to you.

Quote from @Bruce Woodruff:

Quote from @Dan H.:

Quote from @Bradley Buxton:

@Adam Watanabe

Converting a garage is not the best idea for the exit of a property. Many people still want garages for primary residences. By having a garage converted, you limit the value of the home and the buyer pool to investors. At 120k/2k that is 60 months or 5 years on the return. @Dan H. has some good insights on ADU conversions.
Generally, it would be better to put the $120k towards the down payment of another property so you can gain the equity even if the cashflow is breakeven. 

thanks for the tag.   To the OP, I regularly check ADU addition underwriting.  I encourage accurate and conservative underwriting.  On an ADU addition, the most important aspect of the underwriting is to KNOW the value that will be added by the ADU.  In the absence of sufficiently comps, expect a very poor valuation.  

I suspect the cost to convert an 450' garage to an ADU will approach $150k. The issue is it will likely add ~$75k of value resulting in an initial negative $75k (a value subtract). This initial negative position needs to be recovered before any cash flow is obtained.

I am also a bit skeptical that a 450’ unit can achieve $2k rent in Sacramento.

Using 50% rule (expenses other than mortgage is 50%) on a financed ADU, 8% 30 your loan at 80% LTV.

$2000 - $1000 (50% rule) - $881 (P&i) = $119/month
$75k/$119 = 630 months to recover the initial negative equity. This is 52.5 years.

Let’s use OP’s $120k with $45k initial negative position.
$2000 - $1000 - $704 (P&i) = $296/ month
$45k/$296 = 152 months or 12,7 years to recover the initial equity.

Building a single smal, unit is very expensive development.

Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:
1) The value added by the ADU addition is often significantly less than the cost of adding the ADU. Search the BP for ADU appraisals to encounter numerous examples. This creates a negative initial position. This negative position can consume years of cash flow to recover. Make sure you know the value the ADU will add to the property before building the ADU.
2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged by the ADU (HELOC, cash out refi, etc). Leverage magnifies return.
3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR. However if I do a BRRRR I can achieve infinite return by extracting all of my investment. Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).
4) Adding an ADU is a slow process. It can take a year or more to complete an ADU. During this time you are not generating any return from the money invested in the ADU. This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return.
5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.
6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties. This may affect value or time required to sell.
7) Adding an ADU does not make the property a duplex. For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy). Duplex have different zoning that may permit additional units. Duplex can always add additional units via the ADU laws.
8) Related to number 1, purchasing a property with an existing ADU is cheaper than buying a property and adding an ADU. Why add an ADU if it can be purchased cheaper?
9) adding multiple ADUs or adding an ADU to a quad looses F/F conventional financing. This reduces exit options and affects the value.
10) Small number of small units is the most expensive residential development there is. This implies residential units can be built at lower costs and provide better return than building a single ADU.
11) adding an ADU to SFH can make the SFH fall under rent control. In CA currently only MF properties are rent controlled. If the house is older than 15 years old and an ADU is added, it can become rent controlled. Rent control laws are market specific. Make sure you know the impact that adding an ADU will have on any rent control.
12) investors seldom include the land value in the overall ADU costs. The reality is the land has value.

Good luck

 Dan is the expert on all of this, so I would take serious note of his opinions :-)

As I am currently looking into doing an ADU in CA to have a home close to family, I would only add that, although CA is generally ADU friendly, the regulations that are attached to the building of them can add a lot of cost.

For instance, if the ADU will be a detached unit, you are required to add a complete solar system. Also (depending on specific County/City location) you may have to use only a tankless water heater, add special costly insulation, and on and on....

I would very carefully check out your building costs specific to your area.....do not just figure that it's X per Sq ft., you will be very surprised.

Thoughts, @Dan H.? ^^^

In general the smaller the unit the higher the psf. There are other cost drivers like ease to build and finishes, but 2 different choices of ADU on a lot with same level of finishes and the smaller one will cost more per square foot. This likely makes sense to most people.

In many CA markets, they are building multiple ADUs through bonus density and/or low cost housing options. For the low cost housing options, the jurisdiction approves addition units based on some being deed restricted to low cost housing for a certain amount of time. The low cost housing option has a risk in that jurisdictions are putting up more road blocks to transition to traditional housing at the end of the agreed upon duration. No one knows what will be in effect by the time the low cost housing committed time ends. Basically the jurisdictions seem to have no issue changing the rules mid game and are too ignorant to see how this discourages further low cost housing. The developers currently do not care because they typically do not hold the property, they sell it after development. However, they will when the value of affordable units falls further due to the risks involved.

Developers make the most money on large number of large units. If you recognize rye reason for this, you get an understanding of the challenges building a single, small,unit on a property that already has a unit.

One of my long ago protégés was the land provider on this effort. The property sold for ~$600k above its current use value (note he acquired it below market value so made more than this - A small 3/1/2 he sold for $1.5m about a year ago (you can see the original house in the video in the link)). My protege did well. I suspect everyone involved except the neighbors did well financially. The neighbors’ homes likely lost value and definitely lost convenience if for no other reason than the parking became awful.

https://www.cbs8.com/article/news/local/working-for-you/new-...

Good luck

I require a discount for repairs that allow me to add double the cost of the repair in value.   If the discount with respect meets that criteria, then nothing has scared me.  I have purchased a property with a $32k foundation issue and a property with over &40k septic issue.  

Why must it add double the value of the repair?  Repairs are work and have risks.  My time is valuable; I do not work for free. 

I would have zero interest in work that was getting a discount of 59% of the cost.  Not only would you be working for free, but you in effect are paying to work.  In addition there is no compensation for any risk. What happens if when doing a $10k repair they find something that adds to the cost.  This is far from rare.

good luck

Quote from @Allen Ramirez:

You are correct! A live-in-rehab wouldn't be ideal for my current situation. And we ARE renting in RB. My wife and I don't plan to stay in the area after our kids are out of school, and prices in our area are out of our possibility. 

That's great to hear about your son! I am honestly going to try and steer my kids into real estate as well. My wife and I did the schooling and "normal" job route and are up to our ears in student debt. But we're giving them all options for opportunity. 
 

$365k for Hillcrest/MIssion Hills sounds like a steal! All the numbers sound great too. I'm sure keeping it long term will end up getting more cash flow in the long run, not to mention appreciating like crazy eventually. That's such a great area to invest in, didn't think prices where that favorable. 

My goal and focus is to take properties that NEED some serious fixing up, and force appreciate it as much as I can. I am Structural Engineer by profession so I have extensive knowledge in building practice and dealing with GC's. Not to mention being able to do the permit plans myself. 

Please keep me in mind if you find any other off-market possibilities! Also, how are you getting your off-market info if you don't mind me asking? Agent? Wholesaler? Property Manager? Would it if you had any contacts that you'd be willing to share :)

Thanks for your time and knowledge BTW! much appreciated! 

Off market virtually always have risk or require a lot of work. In general risk free, rent read properties are typically sold via the MLS and are not offered off market. In addition, most off market listings are not that great a discount because the competition in this market is significant and everyone (even off market) desires to sell at the highest price they can obtain.

4957 Brant st #8 was $360k (I remembered it wrong when I said $365k). It is a 1/1, but it was a mess and has finance challenges. It sold in less than 3 hours. Hopefully the person who went under contract understands the finance challenges. The EMD was $15k so breaking contract is not cheap. My son's play would have been to MTR it (HOA does not allow stays less than 30+ days). Ideally at least cash neutral year one.

In general I recommend newbies start by using a real estate agent that can help protect your interests. This will limit the upside, but it will protect you from the worst case scenarios (such as potentially not understanding the finance challenges).

If you decide to ignore my advice, you can pm me and I will provide some off market options for you to connect with. You can network to obtain additional sources.

Good luck

Quote from @Bradley Buxton:

@Adam Watanabe

Converting a garage is not the best idea for the exit of a property. Many people still want garages for primary residences. By having a garage converted, you limit the value of the home and the buyer pool to investors. At 120k/2k that is 60 months or 5 years on the return. @Dan H. has some good insights on ADU conversions.
Generally, it would be better to put the $120k towards the down payment of another property so you can gain the equity even if the cashflow is breakeven. 

thanks for the tag.   To the OP, I regularly check ADU addition underwriting.  I encourage accurate and conservative underwriting.  On an ADU addition, the most important aspect of the underwriting is to KNOW the value that will be added by the ADU.  In the absence of sufficiently comps, expect a very poor valuation.  

I suspect the cost to convert an 450' garage to an ADU will approach $150k. The issue is it will likely add ~$75k of value resulting in an initial negative $75k (a value subtract). This initial negative position needs to be recovered before any cash flow is obtained.

I am also a bit skeptical that a 450’ unit can achieve $2k rent in Sacramento.

Using 50% rule (expenses other than mortgage is 50%) on a financed ADU, 8% 30 your loan at 80% LTV.

$2000 - $1000 (50% rule) - $881 (P&i) = $119/month
$75k/$119 = 630 months to recover the initial negative equity. This is 52.5 years.

Let’s use OP’s $120k with $45k initial negative position.
$2000 - $1000 - $704 (P&i) = $296/ month
$45k/$296 = 152 months or 12,7 years to recover the initial equity.

Building a single smal, unit is very expensive development.

Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:
1) The value added by the ADU addition is often significantly less than the cost of adding the ADU. Search the BP for ADU appraisals to encounter numerous examples. This creates a negative initial position. This negative position can consume years of cash flow to recover. Make sure you know the value the ADU will add to the property before building the ADU.
2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged by the ADU (HELOC, cash out refi, etc). Leverage magnifies return.
3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR. However if I do a BRRRR I can achieve infinite return by extracting all of my investment. Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).
4) Adding an ADU is a slow process. It can take a year or more to complete an ADU. During this time you are not generating any return from the money invested in the ADU. This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return.
5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.
6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties. This may affect value or time required to sell.
7) Adding an ADU does not make the property a duplex. For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy). Duplex have different zoning that may permit additional units. Duplex can always add additional units via the ADU laws.
8) Related to number 1, purchasing a property with an existing ADU is cheaper than buying a property and adding an ADU. Why add an ADU if it can be purchased cheaper?
9) adding multiple ADUs or adding an ADU to a quad looses F/F conventional financing. This reduces exit options and affects the value.
10) Small number of small units is the most expensive residential development there is. This implies residential units can be built at lower costs and provide better return than building a single ADU.
11) adding an ADU to SFH can make the SFH fall under rent control. In CA currently only MF properties are rent controlled. If the house is older than 15 years old and an ADU is added, it can become rent controlled. Rent control laws are market specific. Make sure you know the impact that adding an ADU will have on any rent control.
12) investors seldom include the land value in the overall ADU costs. The reality is the land has value.

Good luck

Quote from @Allen Ramirez:

@Dan H. This is all great info Dan thanks!! I do agree that trying to find a "cheap" market isn't the way to go, and is not necessarily what I'm looking for. I'm looking for "decent" areas that are up and coming where the house prices are somewhat moderate, like around the $200-300 range. And this doesn't work for me, especially living around Rancho Bernardo. I'm limited to the down payments for conventional loans or even hard money loans. This is the reason of me wanting to look elsewhere. So right now, I'm trying to find different ways and avenues to start to put together a good team to work with. Just trying to find the ideal location that works for me and my current situation haha.. but all the info you gave is incredibly valuable, thank you! 

 I assume your profile picture is your immediate family. If you have a wife and 3 children, a live-in rehab is probably too large a sacrifice. I also do not know if you are renting or own in RB.

If you do not own, OO after a rehab for a year may present some opportunity. Maybe you can qualify for a NACA loan.

We live in poway. I have a 22 year old son just starting in RE. He has led 2 unit rehabs in the last 6 months.

Last weekend an off market 1/1 unit in Hillcrest/Mission Hills got texted to me. Its price was $365k. It was going to have finance challenges. My son is locked into his current home for a while, but if he was not this could have been the play. Live-in rehab for a couple/few months. Rehab budget $20k to $25k for 1/1 interior should cover re-doing up to every thing (but the cabinets looked pretty good). ARV should be al least $430k (that is near bottom MLS 1/1 in that area), possibly higher. At least $40k of value added. Potential refi after value add. Then convert to MTR (HOA bans less than 30 day rentals) to hopefully at least break even cash flow in the first year.

Forecast 4% annual market appreciation and rent growth long term (will var6 on a yearly basis). This would be $17.2k of appreciation the first year. By the 2nd year there should be some positive cash flow and hopefully more appreciation.

Is this passive? No. Acquisition takes work. Rehabs take a lot of work (but a 1/1 interior only is a small rehab). Setting up for MTR is work. Managing an MTR in on-going work.

Now imagine this on a larger scale. Either multiple units or bigger properties.

I am convinced that the most certain way to do well in RE in this market is not to purchase a rent ready property on the MLS, place a tenant, and enjoy the cash flow. It will almost certainty have negative cash flow. The negative cash flow will eat into the return from market appreciation reducing the return. The best chance of achieving good returns in RE requires an active role. Are you prepared to commit the time and effort required to achieve high return via RE?

Good luck

I have done well with brrrrs in San Diego, but it is my opinion that the interest rate makes the hold after a refi to extract value bleed cash.  This is not only true in San Diego.  There are 2 recent studies that both show it is initially cheaper to rent tan owner occupy in virtually every large city up in the US.  Note owner occupy has advantages over LL such as no vacancy, lower interest rate, no tenant flips, in general lower maintenance/cap ex, less bookkeeping, less need for asset protection, etc.

However, you thought that cheap market is better for brrrrr is flawed. I want a market were my value add adds the most value.  That is the high cost market.  Last year I added a half bathroom out of existing space in a very high cost market (over $2k psf - missio beach).  Comps showed the hat bathroom added ~$50k of value.

In addition brrrr is a long play.  This means long term appreciation is desired.  High cost RE markets typically have higher appreciation forecasts.   The long play also means rent growth is more important to the cash flow than initial cash flow.  In general high cost RE markets have better long term rent growth.  Both these are not happenstance as market RE price is based on numerous parameters of which expected appreciation and expected rent growth are 2 key parameters.  

I do not flip (it is a job, stop flipping and you stop earning) but with the current rates and their impact on cash flow, I think it is more a flippers market than brrrr market at this time.  This belief is not isolated to San Diego, but virtually all markets. 

By the way I have done quite a few brrrrs.   I am on site virtually every day during the value add communicating and being responsible.  I could not manage doing my first brrrr OOS.

good luck

Quote from @Terra Padgett:

Quote from @Dan H.:

Quote from @Terra Padgett:

Quote from @Dan H.:

Quote from @Terra Padgett:

Quote from @Eric James:

Is this based on some data regarding actual "millionaires" or is this just made up?

Also, what people do with wealth once they have it isn't necessarily how they made it to begin with 

No, it’s not made up. There has been research done on the topic and it’s just a common theme found from analyzing financial habits of wealthy individuals. 

Can you provide the source?  There are a lot of things that people believe is fact but are not.  In sports the belief that the more times you beat a team the better chance the other team has to win.  Statistically this is false even though it is believed by many people.  there are countless other samples.

I used to see on this site that investing for cash flow was king.  There were some of us that would point out that statistically that was not true.  Today the sentiment on this site is very different than 5 years ago.

Research from the IRS, the Census Bureau, and studies on self-made millionaires. 7 streams is more of a guideline or general rule per se rather than a strict hard rule for every single millionaire. The key takeaway being that diversifying income is a common trait.

 The census bureau nor irs collect or releases that type of info.  It is not in their responsibility.   I use census data regularly (on virtually every underwriting) and am fairly familiar with their website. 

I join the others that skeptical to your list unless you can provide a link to a half way reliable source showing the data.  You may be simply passing on info you have heard somewhere, but that is NOT a reliable source   

Both the IRS and the U.S. Census Bureau publish data on income sources and wealth distribution, but they don’t explicitly release reports stating, “Millionaires have seven income streams.” Instead, researchers analyze those datasets to draw these conclusions. You don’t have to agree or believe the trends. However many millionaires do, in fact, have multiple income streams. 
Thank You for your comments and thoughts! 

 When you have been asked to provide a link to a single reputable source of one of these “researchers” you have failed repeatedly to provide the source.  I believe your post is Bs.  It may be someone’s view, but not a view from a reputable source.  

Show that I am incorrect and post a reputable source.  Otherwise realize this is only someone’s opinion with no research to support it (which is my belief and various other posts). 

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Hi everyone,

I'm just gonna cut to the chase & be blunt. I have NO. IDEA. what I am doing. All I know, is that I would like to start a journey investing into real estate. Because of this, I require some help on getting started. That's when I came across this website. I understand this is probably a long shot, however I believe one who has a strong desire to learn and is willing to commit, can attract those things they are looking for. So in this case I am looking for someone who can show me the ropes on how to invest into a multifamily property and/or possibly go in on a deal together in the future. Most of all, someone who is willing to provide me with the mentorship I need in order to get a foot in the door.

Thank you,

It'd be a pleasure to speak to any of you

Hey @Marquis Soto, welcome to the BP Forum! What type of MF properties are you seeking, 2-4 MF, or 5+ MF? What is your price range/down payment amount? Are you looking for turn-key properties or something along the lines of a "fixer upper"?

 Hi Jaycee,

Appreciate the welcome! If i end up going for a smaller MF, it would have to be a 4 unit. But the bigger picture I'm aiming for, is at least 5 units minimum. Not sure about prices. I'm middle class, so my only option as of now is to go for an FHA loan. In terms of types of properties, ideally one that comes with less stress and headaches. Not entirely sure because I honestly have no clue how any of this stuff works. I've only just scratched the surface.

 @Marquis Soto Here's your first lesson, FHA loans max out at 4 units. Also, to use FHA, you have to house hack. So with that, would you be looking for a 4 unit MF in San Diego?

@Jaycee Greene Yes! I remember seeing that during my research. Unless I can find the funding or someone who is willing to take part ownership in exchange for a down payment, the FHA is what I will be going for. & yes, this would be in San Diego.

@Marquis Soto have you found any fourplexes in San Diego that fit your budget?

 @Jaycee Greene not yet. The ones I have come across have been a little out of range. Gonna keep an eye out

 @Marquis Soto the cheapest I could find doing a quick search was around $850k. 

 @Jaycee Greene that doesn't seem too bad. This was for a four unit? Where was this listing posted?

 here you go: https://www.realtor.com/realestateandhomes-detail/3064-Island-Ave_San-Diego_CA_92102_M29296-76669?from=srp-list-card

@Jaycee Greene doesn't seem like that one is currently active. It's shown as pending. Since that one is a little beat up, what opportunities are there from an investor perspective?  

A little beat up if priced appropriately for the condition is one of the few ways MLS RE can work in the short term. 

but 1) Mountain View is a rough area.  I put is above Logan heights and encanto only.  2) two of the units are rented below market.   The city of San Diego rent control rules are a bit mor3 cumbersome than the state rules.  One area that would be relevant is their no fault eviction for unit rehab requirements are more complex and the buyout is higher.

San diego is a tough re market currently.  If you think you are going to buy a rent ready (minimal work required), cash flow positive property in a decent area at near FHA LTV you will be disappointed.  If this is your expectatiin, yo7 may as well save your effort.

good luck

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Quote from @Jaycee Greene:

Quote from @Marquis Soto:

Hi everyone,

I'm just gonna cut to the chase & be blunt. I have NO. IDEA. what I am doing. All I know, is that I would like to start a journey investing into real estate. Because of this, I require some help on getting started. That's when I came across this website. I understand this is probably a long shot, however I believe one who has a strong desire to learn and is willing to commit, can attract those things they are looking for. So in this case I am looking for someone who can show me the ropes on how to invest into a multifamily property and/or possibly go in on a deal together in the future. Most of all, someone who is willing to provide me with the mentorship I need in order to get a foot in the door.

Thank you,

It'd be a pleasure to speak to any of you

Hey , welcome to the BP Forum! What type of MF properties are you seeking, 2-4 MF, or 5+ MF? What is your price range/down payment amount? Are you looking for turn-key properties or something along the lines of a "fixer upper"?

 Hi Jaycee,

Appreciate the welcome! If i end up going for a smaller MF, it would have to be a 4 unit. But the bigger picture I'm aiming for, is at least 5 units minimum. Not sure about prices. I'm middle class, so my only option as of now is to go for an FHA loan. In terms of types of properties, ideally one that comes with less stress and headaches. Not entirely sure because I honestly have no clue how any of this stuff works. I've only just scratched the surface.

Here's your first lesson, FHA loans max out at 4 units. Also, to use FHA, you have to house hack. So with that, would you be looking for a 4 unit MF in San Diego?

FHA maxes at 4 units but due to sustainability requirements is virtually always limited to SFH and duplex (which does not have sustainability requir3ments) in San Diego.

however an conventional OO loan was introduced a couple of years ago that can go 95% LTV. This loan is better suited for triplexes and quads that will be OO.

@Marquis Soto have you looked into NACA loan Lots of hurdles, but could be a good option for you if your income is modest in San Diego. If you go this route make sure eithe4 your agent or mortgage broker has experience with the loan product.

San Diego is currently a difficult RE market without taking active role such as flipp8ng, wholesaling, value adds, etc,

My son is 22 and getting started in San Diego RE.  Not an easy path.  I fear I have made it look easy (and it used to be easier than now). He almost went under contract yesterday on a unit, but I am glad he did not because it was a tic/coop so had minimal exit options (but a 1/1 in hillcrest/mission Hills for $360k is tough to beat).  Perhaps the cheapest hillcrest 1/1 in many months.

good luck