All Forum Posts by: James Tiu

Hello BP,

I'm in the middle of a BRRR duplex project in San Diego. It is an identical looking duplex with approximately 720square feet each and 2 bedroom 1 bathroom. Right now, I am faced with a dilemma. Should I turn this weird hallway space that connected the 2 units into a large closet, or should I turn it into 2 half baths. Each unit would then have a half bath/powder room. The 1st unit half bath would be a little awkwardly placed inside a room. The 2nd one would have a more public access from hallway.

I believe it is worth it from a ROI standpoint. I am being quoted $7000-8500 for both half baths. According to the comps I would have an extra $100-200/month total rent from the units. My issue is I don't have much more in my construction reserves to budget this extra renovation. I would either be putting this all on credit or eating into my 6month emergency fund reserve.

My biggest question is, from a strictly ROI standpoint would you add the half baths to each unit for $7-8.5k for an extra $100-200/month. Please also share thoughts if the placement of a half bath would be awkwardly placed in a room.

Thank you BP!

Hello BP. I am closing on escrow in a couple weeks on my 2nd duplex. I have noticed that almost no property at this moment is creating cash flow here in San Diego for long term rentals. I am planning on turning this new property into a short term rental and list it through one of the many popular websites. I would prefer to have a STR management team manage the listing and the day to day task of turnover, cleaning, stocking, etc. My questions are

1. Has anybody had experience with short term rentals here in San Diego, and how did you get started?

2. Would anyone recommend a STR management team that could manage my listing? What are their fees?

3. Would finding a cohost be a better idea for me?

Any feedback on this matter would be greatly appreciated. Thank you ahead of time for your experiences and insight!

Hello Dan! Thank you for your reply and insight. I should have made it more clear. I guess the real question I have is, should I overpay about $60k to have a mixed use zoning? The zoning is essentially what I am overpaying for. The comps for a similar property would be around $450k. I would be buying at about $515k. I understand it is best to have as many units as I can to put in the property but I cannot finance that. The ADU is the most I can finance given my financial situation at the moment. My ultimate goal for that property is to build a mixed use 10unit commercial/mostly residential property. That is not something I have enough knowledge or financial resources to accomplish now. I see that goal happening 10years from now. But I cannot do that 10years from now if I do not have the property.

Hello everyone! I have been following bigger pockets and reading a lot of posts for at least 3-4years. This is my first post. A little background about me. I bought a duplex at City heights in San Diego November 2016 for $450k with an FHA loan. I refinanced the loan to a conventional in May this year. I pay $2.8k a month. I rent one unit for $1500/month and I live in the other. If I got the market rate I could probably get around $1800/month.

That leads me now to my next purchase I am trying to make. I wanted to ask everyone in the community to give me their thoughts, insights, and experience with my next purchase. The subject property I am trying to acquire is in national city. It is a SFR with 1650square feet and 3bedrooms and 2 bathrooms. Last time it was updated was probably in the 70's or 80's. It was being offered between $525-550k. Realistically, the comps for that type of property is probably somewhere in the ballpark of $450k. The reason I would even be interested in this overpriced property is because it has a mixed use zoning. The zoning could allow for up to 11units. I have offered and counter offered and we are at a stalemate. I am at $520k purchase and $10k back in escrow. Sellers are at $520k and $5k back in escrow. $5k is not going to break the bank for me. If I purchase this property I plan to use an FHA 203k loan and add a 800sq foot ADU where the garage is. It will likely cost between $80-100k. My final cost for the property will be between $600-620k assuming a $520k purchase price. My mortgage will be around $4.4k/month for a $620k mortgage. I will rent the main house for the market rate of $2.4k/month and live in the ADU. So I will effectively be paying $2k/month for a 800sq foot 2bedroom/1 bathroom in National City. Looking at recently sold duplexes that have a very similar main house and a smaller granny/ additional unit the comps are around $675-750k. If the property were to be appraised around $750k and my mortgage was at $620k I would be able to refinance into a conventional loan and remove the FHA mortgage insurance. My monthly mortgage would then be at $4k. And my portion of paying at $1.5k for a 800square foot 2bedroom/1 bathroom is a lot more pallateable at that rate.

My main question to the BP community is this, is this a good deal? My main goals going into this next deal is that I get instant equity and that the rental income would cover the mortgage once I refinanced and rented the other ADU out. It seems if the property would be appraised for $750k after building the ADU then this property would be a great buy. If it apprasises under $700k, I believe it will still be a good buy but not a great buy. I will have instant equity but I will not be able to achieve the goal of covering the mortgage with the rental income right away. I understand that I should also be budgeting other expenses such as vacancy, repairs, and property management. Unfortunately, in San Diego's market I do not believe those properties exist unless you have 20% down which in this case I wouldn't have 20% down. My FHA and the mortgage insurance handicaps me a little in achieving rental income covers mortgage. The trade-off is low down payment. Anyways, I would love to hear from BP and what their thoughts are. Thank you very much ahead of time!