All Forum Posts by: Jorge Martínez

Hi, I am actively looking and putting offers for my first rental property, I just saw a townhome that I like from the 70's that needs some rehab, and a few blocks from it there is new development offering same type of units (a bit bigger) 10% more expensive with delivery lead times of 6 months. My strategy is long term appreciation with breakeven cashflow (for now), so the question is what do you guys think is a better investment long term? Thanks

Jorge

1 Vote

San Diego, California

Quote from @Account Closed:

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Dan H.:

Rent ready, non value add, mls purchases in San Diego are large negative cash flow if financed at current rate with a high LTV loan. When prices compared to rent were more affordable, I thought the 50% rule was conservative in San Diego but I no longer believe this to be the case. 50% rule is fairly close easy predictor.

San Diego has always appreciated over the long term but in the short term anything is possible. From 2012 until COVID, I was confident of short term appreciation. I am not confident of short term appreciation. I can see a case for near term price decreases.

This is my market. I buy regularly but have not purchased since Dec 2021 due to the numbers not meeting my but criteria. This is in spite of getting numerous off market properties sent to my email.

Good luck

Living in San Diego im shocked what some deals go for. Sadly the market can stay irrational longer then you can stay solvent!

I do not know how you define irrational. The affordability was worse in the 1980s. Just a couple of years ago (2021 and early 2022) that affordability was better that a majority of the last 40 years. So if you define them market as irrational implying affordability, then it has been irrational over 40 years.

it is my view that the market is efficient. It is costly to live in one of the finest climates in the world (assuming you were not lucky enough to get the small number of lower income units - like winning the lottery).

note the San Diego cash flow is bad now, but it has been poor for many years. My first purchase over 30 years ago the piti equaled the market rent which implies it was cash flow negative when including all expenses. 2012 to 2021 was the good times for RE investing in San Diego, but most people could not see it.

good luck

2012 to 2021 was the greatest run in real estate ever. Betting that is going to happen again while new smart participants have entered the market(sophisticated players like black rock) and retail (everyone who watches finance youtube knows about real estate) I think is a foolish bet. Not to say real estate wont gradually appreciate, but for gradually appreciating illiquidity with capex risk, there are better investments out there.

I understand this however the attractive of real estate vs other investments is that with real estate you are making money (appreciation) out of some one else’s money and not only your investment right ? and that is a huge difference even if the market do not appreciate at the same level than the last 10 years

0 Votes

San Diego, California

Quote from @Dan H.:

This is my market. I buy regularly but have not purchased since Dec 2021 due to the numbers not meeting my but criteria. This is in spite of getting numerous off market properties sent to my email.

Good luck

Thanks Dan, thats what I was afraid of, my target is hold for 10 years so I am hoping I can refinance at some point and sell at a considerable higher value in 10 yeras or so.

0 Votes

San Diego, California

Quote from @Theresa Harris:

If you find a place where the numbers work for you, then get it. The real numbers are more complicated because while we count mortgage payments, the reality is some of that is for interest and the rest is against the principal, so really some is going to you in the long run, but is currently tied up as an expense. Same with putting a larger deposit down to make your monthly payments lower doesn't mean you are cash flowing more as you put more money down to 'force' the cash flow.

What matters most is that you are happy with the numbers and they work for you.

Thank you, the appreciation is very good potentially and it easily offset de negative cash flow, I am just not very happy having to put money every month

0 Votes

San Diego, California

I am looking at my first rental property investment, with the current rates and San Diego pricing cashflow is very hard, so I wonder if I should remove tax property and insurance from my cashflow calculations as they are 100% deductible at some point. This will get me in a better position

Thanks

Jorge

0 Votes

San Diego, California

All Forum Posts by: Jorge Martínez

Jorge Martínez has started 2 posts and replied 5 times.

Post: New Construction vs Old what appreciates better long term?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Jorge Martínez has started 2 posts and replied 5 times.

Biggerpockets Logo Post: New Construction vs Old what appreciates better long term?

Biggerpockets Logo Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Biggerpockets Logo Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Biggerpockets Logo Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Biggerpockets Logo Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: New Construction vs Old what appreciates better long term?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?

Post: Should I remove tax deductibles (property tax, insurance etc) For cash flow?