All Forum Posts by: Dan H.

There is a similar meetup this weekend in Escondido at 1614 E Grand Ave at 10 AM on Sat.  Search on Bigger Pockets for contact info, etc.

My only association with it is that I plan on attending it, schedule permitting.  I also happen to have 2 properties (5 units) near this property which results in some increased interest for me.

Maybe I will see you there.

I also hope to attend the one @Kevin Fox noted.  Again my only association with it is that I plan on attending.  It is significantly higher end (>$1M) than anything I have done so is less applicable to me than the one in Escondido.

Good luck.

Like @Justin R. I had less units in 2008 (I think I had 3: One in Claremont (San Diego) and 2 in Escondido).   I had 0 vacancies and no rent decrease.  So I had 0 consequences of the recession in my rentals.

The chart Justin provided does not show the last couple of years (2014/2015) but I have seen significant rent increases (>10%) in the last couple of years.  So if San Diego median in 2013 was $1289 (which seems low to me for 2013) it is at least $1400 now.

My last 2 units vacancies were both in working class Escondio in the last couple of months:

- 2/2 ~1300' (December): $1750 paying full utilities including water.  I am ashamed to say this but previous tenant was paying less than $1200 and I was paying the water but tenant was there ~10 years.

- 2/1 ~700' (January: Moves-in in the middle of January, real nice unit): $1500 paying full utilities. 

Both units rented at initial open house (i.e. they were easy to rent).  These are not central San Diego location or great neighborhoods.  They are both nice units in working class neighborhoods.

My point is the median has to be quite a bit above $1289 (my guess is median is above $1500 for San Diego).

I based my statement on this thread: https://www.biggerpockets.com/forums/48/topics/218...

Something seems inconsistent as 6 months ago someone got a VA loan based on 4 units without 25%. Maybe it was that he was disabled.

I'm not a VA loan expert (not a veteran or a mortgage broker). I just remembered reading the thread referenced.

$580k is the limit for a SFH in San Diego. The limit steps up for each of duplex, triplex, and quad. The max for quad is quite high in San Diego (7 digits). This property being a duplex would use triplex limit for that county.

I have seen cases were VA rate is higher than conventional but I view it a function of the loan to value. The conventional requires more money at purchase.

I do not know if low ceilings present any hazard.  

The Windows is an egress issue.  When I replace windows in units I often have to lower the window sill to be compliant to current code.  So the current code is to make it easier to exit in case of fire, etc.  

So how are the current Windows?  Are they original to the 1940s?  If so they are ready to be upgraded and can be brought up to code when replaced (by lowering the sill and ensuring bedroom windows are big enough). 

If the unpermitted area is as safe as if it were permitted I would have little issue renting it out.  

Good luck

I am as green as they come.  I am mellow about everything except I am a self-proclaimed conservation Lunatic.  My house has PV that generates more electricity than we use, a well, a septic system, solar pool heating, energy efficient appliances, under sized multi zone HVAC (why heat/cool house locations that are not currently in use), rotating compost bins, and low e**2 Windows.   

I have considered solar on rental properties quite a few times.  The environmentalist in me wants to do it but the investor in me is convinced it would be a poor investment for the reasons noted by @Justin R.  Where my rentals are located I suspect that the rent increase to cover the expense would make it more difficult to rent and it is another thing to maintain.  For my home I try to clean the panels two times a year in the dry season (Mar to Oct) and I have had an inverter fry.  Solar should be low maintenance but it is not 0 maintenance. 

I hope your market can warrant solar panels for rental properties but I suspect most markets do not.  

Good luck

I'm a fan of leveraging your money and therefore recommend the smallest down payment that provides decent interest rate.  I have properties that I put 25% down because it resulted in significantly lower rates but if the rate was marginally better than less down I would have gone with the smaller down payment. 

I agree with @Alexander Ball that multiplex house hack is very attractive for young investors (I wish I had gone that route in my 20s or 30s). 

Good luck

We specialize in Escondido.  We own a triplex on Beach 1 block South of Grand and a duplex on Ohio Ave a couple blocks north of Grand.  

We will try to attend.

I used IKEA 13 years ago on a SFR in San Diego so I am sure a lot has changed.

At the time they did layouts for free.  I heard they changed that but maybe they changed back.

I paid IKEA to provide a crew to assemble them.  So the boxes were delivered and I just checked box counts.  The assemblers were scheduled for the next day and came with a small crew and put them together real fast.  Back then I did not have my current GC so I used an installation crew (not same crew as did the assembly) suggested by IKEA that did a great job.

My current handyman is slow at assembling cabinets. My current GC does not like to assemble them.  So if I were using Ikea today and they still offered assembly I would pay them to assemble it.  They do it repeatedly and therefore are both fast and will get it right.  Also if a part is missing it is on them to take care of it.

The cabinets are holding up well.  The granite counter had no lip and tenants dried their dishes on counter that dripped down cabinet front that is in front of sink so it needs some refinishing.  Everything else is perfect.

We have done 4 rental kitchens since then and have not used IKEA but I would consider using them again.  Two of the kitchens we did since them we used discontinued line of cabinets at great discount, 1 we used refurbished used cabinets (apparently the cabinets were not sealed and so they are wearing at the handles too fast so if you get refurbished make sure they are sealed/lacquered for rental units), 1 we refurbished the cabinets that were already in the unit.  If the unit has solid wood cabinets then refurbishing in place is a viable solution.

We have an LLC. We looked into umbrella coverage but LLC provided better protection. Having stated this properties purchased prior to LLC are still in our name so we are not fully protected.

Analyze your net worth and determine best solution (LLC, umbrella, no additional coverage) but realize it may not be easy converting the two existing properties to the LLC.

Good luck