All Forum Posts by: Jonathan Camacho

@Jonathan Camacho

I am also in San Diego. I recommend buying a condo in 92101 (downtown) and getting a short-term rental license. Southern bankers Hill is part of this zip code as well. 

There are still licenses available for this area and bankers hill and some parts of downtown have HOAs that allow STRs. 

@Maxwell Ventura is an agent that helped me do this in Little Italy. 

@Jonathan Camacho

I am in a similar situation (San Diego, VA loan, looking to buy my first property) and there are some insights that may be of use after looking for a home for about a year and a half.

1. Renting at the moment is cheaper almost everywhere than buying. Due to the unique situation at the moment of high rates and high prices, jumping into a property may be significantly more expensive. As many landlords have locked in comparatively lower rates to those of today, thus their costs are much lower so the threshold for profit is lower. Meaning that even with profits from renting considered they can offer rents that are lower then mortgage at the current rate levels.

2. Inventory: Since many folks refinanced at extremely low rates rarely anyone is willing to sell at the moment as they would have to repurchase at much higher rates, lowering the inventory causing prices to maintain high. Therefore once rates lower it may cause some small growth in price due to folk being able to afford more, however we will likely see a return to somewhat normal inventory levels driving prices down.

3. Loans: Since the structure of amortization has one paying significantly more interest at the start than principal (within the ratio of payments) at the start many loan types seldom give you any equity in the first couple of years. Therefore, you do not really own much of the property you are paying for at the start of the mortgage. Thus, it may pay off to wait for more favorable pricing situation, as you do not have much ownership anyways.

4. Inventory Timeline: Since when buying you are competing real time with several offers at the same time, buying a property can be significantly faster than that of selling. This is due to many sellers listing a property and waiting for an attractive offer, sometimes waiting for months until one comes along they are willing to accept. As a result, price increases are faster than price decreases.

Overall, I am seeing that it may be best to sit on the sidelines for a bit until inventory increases and concurrently rates slowly decrease. We are seeing slow inventory growth at the moment and when conditions are more acceptable for sellers, they will begin to liquidate. As a result I think that there will be more affordability in the coming months. We are also seeing consumer debt growing quickly (likely due to increases in cost of living) and increases in foreclosures at the moment, potentially leading to another source of inventory growth. 

P.S. Please keep me in the loop on what you are seeing. We have similar situations and some more insights may be beneficial.

@Jonathan Camacho, I agree with those suggesting a local SD VA Househack. It's one of my niches here in SD, and there are many ways to get you offer accepted in a competitive market. As the year goes on it will be come more competitive, which mean prices will rise, and capturing appreciation is really what makes the SD market attractive. I know many military investors, househacking here while at the same time investing in more cash flow markets. Happy to connect you!

You sound like a solid buyer. Take advantage of your VA loan and start in San Diego area. Have you considered areas right outside of Diego like Temecula? Prices are stable, inventory is still on the lower side but you're not seeing ridiculous things like appraisal gaps and bidding wars way over asking price. Not sure what it will look like once rates drop.

@Jonathan Camacho

Your circumstance necessitates various considerations, and the decision to buy your primary house or invest in real estate is entirely personal, based on your financial goals, risk tolerance, and lifestyle preferences. Here are some considerations:

Advantages of purchasing a primary residence include stability, tax benefits, and potential for appreciation.
The drawbacks are High prices in California, opportunity cost, market uncertainty,

Pros of investing in real estate include diversification, cash flow potential, and potential appreciation.
Cons include management responsibilities, market risks, lack of stability, and so forth.

Determine your long-term financial goals. Consider your investing horizon and whether there are any attractive investment options available right now. Investigate prospective investment opportunities and verify you are comfortable with the accompanying risks and logistics. Consult a financial advisor, real estate agent, or investment advisor for tailored advice based on your unique financial circumstances and objectives.

There is no one-size-fits-all solution. Consider the benefits and downsides depending on your priorities and financial goals. Consider obtaining advise from professionals who can offer insights tailored to your situation.

Good luck!

@Jonathan Camacho

You are better off in San Diego and your capital invested would be less in san diego than some other random market and your overall returns will likely be higher in the long term here...With a VA loan I highly recommend you house hacking for your first place...even if you are married even if you have kids. You can be in a 2 unit property with 2 houses on one lot. My wife and I are currently looking for our next primary property but we currently house hack and we have a 4 year old and a 2 year old.

I do not recommend going out of state at all...there is no better way to purchase in a place like San Diego than house hacking multifamily with a VA loan. You can build up from that, its just about getting started with low money or in your case you can with no money...here is how I got started in San Diego.

I started off in San Diego with low money down and the first property my wife and I purchased was under 400k as that was what we could afford in 2014 and by 2017 we were purchasing our 3rd property and it was still under 400k, not in particularly great areas...so first 3 properties were are single family homes or Condos (in East County)...then we house hacked a duplex in 2019 and fully renovated those units, and we are currently submitting plans to put 2 ADUs in the back. In 2020 we did a cash out refinance on the first 2 properties we purchased and pulled out over $250k between those units ....we used the $250k to purchase a triplex in La Mesa Village in the first half of 2021 (we are currently adding an ADU to make it 4 units). At the end of 2021 we sold the condo we purchased in 2017 (put less than $40k down initially) to do a tax deferred 1031 exchange and purchased a ugly/tiny 4plex in Golden Hill but I was selling 1 unit to buy 4 in a better area so I was happy.....in 2022 we purchased a 4plex with low money down, also in east county using a small bank that did this type of loan at the time....

So between 2021 to 2022 we purchased most of our units (11 units) with little money out of pocket since 2 of them were from cash out refi funds and 1 was from a 1031 exchange. If we didn't purchase those initial properties we would have never been able to do the above and the properties that we purchased were retail and not in great areas but it was better that we purchased than not doing anything and letting time pass by. They were all "base hit" deals at best but it worked for us, and of course if we purchased value add and in slightly better areas we could have done even better but we did not have the funds initially to take on properties that needed work.

I had a few mid west properties for a bit and sold those off...from that experience I can say for me, I would rather have 16 units in San Diego than a ton of units than a ton of doors out of state  in a cheap market with a bunch of expenses

@Jonathan Camacho: We focus on cash flow and tax write offs. There is a balance to be found there. In a typical neighborhood, you ca n find a variety of options for investing. We find properties "off market" and that allows for great latitude in how we invest. 

@Jonathan Camacho

Every house is an investment. Buy a house you can live in as a primary that would cash flow when you move out. CA does have good appreciation. The other option is to find a house you might want to move to later out of state. We have helped some clients in Reno, NV and Incline Village find properties with VA assumable loans. It's a great way to get into a very low interest rate loan. The downside is that you have to cover the difference between the loan amount and the purchase price.

@Jonathan Camacho

i'd look at a whole bunch of properties, all different configurations, to determine if any would be a good fit for you and your family.  only you can decide if a primary both ( 1 ) makes financial sense for you, and ( 2 ) fits your lifestyle.  if you don't want to house hack, then don't.  but there's no rush.  spend 3 or 6 or 12 months looking.  everyone wants to look at 3 properties and get their first offer accepted.  what if you looked at 50 or 100 and made 10 or 20 offers?

now, with that said, would I advise you to continue renting just in order to buy a random rental thousands of miles away that you cash flow $27 a month on, just to "get a deal"?  no i would not.  it is very, very tough to cash flow right now in a random market where you have no competitive advantage.  if you want to continue to work on out of state investing in parallel with everything else, that's great.  but read this thread, and proceed with caution.

https://www.biggerpockets.com/forums/48/topics/1159104-overl...