All Forum Posts by: Dan H.

Your statement on ROI for CA is very incorrect. In virtually every duration (5 years, 10 years, 20 years, and 30 years) So Cal and San Fran areas have been near the top ROI in the nation.

My oldest buy n hold is from 1992. I put $40K down/closing ($167K cost) and refinanced it in 1998 taking out all of the initial investment so that it currently has $0 capital into it. It is worth north of $500K today. I do not really know how to calculate a return when all initial investment has been pulled but doing simple calculation shows that my $40K is worth ~$520K today. So in 24 years it has increased in value ~$350K not taking into account positive cash flow (this unit is a SFR and only cash flows ~$500/month after maintenance and cap expense (I use $300/month cap expense for this unit)). Note also this unit was purchased near a market high (1990 was probably market high) and initially fell in value to ~$147K (1996). So you do not have to time the market and buy at the right time. This is my worst performing investment property that I have held at least 3 years.

My best performing REI property (duplex) was purchased in 2012 for $303K (this was purchased near market low and therefore purchased at the right time) that I placed 25% down. I took out all of initial investment last year. It is worth north of $600K today so has returned a little less than $100K per year since it was purchased not including its positive cash flow of ~$1300/month after subtracting for maintenance and cap expense (I am using $600/month for cap expense ($300 per unit/month (units are detached))).

Statistics show So Cal and San Fran area have been near the highest return in the nation. You can look it up. Calling CA REI a poor ROI is not only wrong but it is the opposite of the facts (it is near the top in ROI).

My view and recent history (last 50 years) indicates there are very few better areas to have REIs than So Cal or San Francisco areas.  Cash flow is only part of the equation that dictates return on investment. 

I expect in the near term future (next 10, 20, of 30 years) So Cal/San Francisco will continue to be one of the better REI locals.

I purchased a duplex ~3 years ago that was below 0.7% that I have made ~$250k on in equity increase  (on a $100k initial investment) and as of this month it is positive cash flow using $500 ($250 a unit) for cap expense.   Refinanced it a few months ago and got my initial investment out.  So now have cash flowing property without any investment cost.  

Needless to say I still am looking for under market duplex through quads in my chosen REI market.

Good luck finding 2% properties and investing in them.

no purchases or flips for 2015.  

After depreciating structures we are in D on our buy n hold. Note appreciation is not reflected.  Appreciation exceeded the income but less so than previous few years.  So 2015 was likely our worse year this decade. 

2015 is not much to brag about for us. 

my recommendation is you house hack in San Diego.  If you do not know the term house hack look it up on BP. 

Traditionally San Diego is one of best REI returns in the nation over any reasonable duration. 10, 20, 30 years if does not matter San Diego is near the top.

House hack, build equity,learn about property management then think bigger.  

Good luck.  

my experience is very few SFR cash flow when including all expenditures including cap expenses. Multiplexes cash flow in working class areas.

I use $250/month for attached and $300/month for average rental size units for cap expenses.  It may seem high but I have calculated it and believe it to be accurate.  

One other bit of advice which is significantly more important on duplex through quads than SFRs, make sure you use closed purchased and not listings in creating your offers. In my area of expertise there is a huge difference between listing price and sold prices on multiplexes but not such a difference in SFRs. 

Good luck.  

I recommend Jason Havel.  PM me for phone number.   Not the cheapest but the best.  On first unit we purchased using Jason as inspector we saved almost $50k due to various findings. 

Similar to other recommendation he sometimes is busy so best to schedule as early as you can. 

Good luck. 

@Dave Foster has the correct person. Michael Swan has been 1031 exchanging out of San Diego for a few years.  He has been converting to cash flow out of state properties.  He would likely have some lessons learned etc.  

good luck

I am pro San Diego REI. So if you want to live in San Diego I would recommend investing in San Diego. You may already know this but for virtually any investor duration of reasonable length San Diego is one of best return on REI in the nation. Does not matter if you use 10 years, 20 years, or 30 years as your duration.

I would look into house hacking a duplex with FHA loan. If you do not know the term house hack look it up on BP.

You will learn a lot, build equity, and be able to leverage the equity as you desire. 

Good luck. 

Our leases forbid subletting and even stipulate what qualifies as a house guest versus tenant.  So if one of my tenants did this he would get evicted and need to go to court to get deposit back as I would not refund it as tenant has prospered by breaking lease and placing property at a risk greater than what I was compensated  for. 

I think it is pretty standard lease language to not allow subletting. 

I do not agree with the rule #1 but not here to debate.

As I have indicated hopefully without insult I consider your plan to be higher risk than keeping granny in her current situation. 

Now for the help...   I apologize but I am poor at names but there is a poster on this site who is a teacher and I believe his wife is a teacher.  They did well in San Diego via appreciation but have been diversifying out if state for a few years via 1031 exchanges.  He indicates he has been very successful at this. Maybe someone better with names can provide his name or possibly search for San Diego and teacher.  

Good luck