All Forum Posts by: Maxwell Ventura

@David Lyons

I have a great structural engineer for you, as well as the other vendors. Feel free to PM and let me know whatever you still need. 

Thanks ~

@Jamie Jeffredo Going off of the information you provided I have a very good idea where you're located as there are only a handful of RM3-7 lots in SD City. The upside for this area w/i the next 5 years is very strong. 

In getting back to your question on what you should do, I think a major factor is what you see happening w/ your current and future employment. You have a great lot you're sitting on right now. 

BUT, the other major point is this: Currently, as I understand it... You will not be able to get financing through Fannie Mae / Freddie Mac (which includes a cash out refi) on a multi-zoned lot if you add even 1 ADU. Something to seriously think about. Luckily, w/ an RM3-7 (1 unit every 1K sq ft) you can add more primarily dwelling units instead of going the bonus ADU route. This will avoid the financing issue I just mentioned. It will just be more costly w/ fees.

@Kunal Bhatia

It really boils down to your level of comfort. Assuming market conditions continue at an upward trajectory (and not necessarily aggressive) I would argue the more you leverage (the lower down payment) the higher your ROI will be. --> Mostly because of appreciation in the SD Market.

Your condo will appreciate the same regardless of your financing, meaning a significantly higher ROI on 5-10% down versus 25%. Will you have a higher mortgage payment + PMI? yes. But your return on your initial investment will be much greater and you'll have leftover capital for strategic fix ups or to get to your next deal faster.

Hope this helps.  

@Christopher J. Montoya

I have a great contractor w/ 30 years experience here in SD that I know will be able to help you. Feel free to PM

@Shaun Weekes

I should have a few great contacts for you depending on what you're looking for. Feel free to DM

@Emma C.

Congratulations for starting to think big picture! As the others mentioned, you're looking at 3.5% via FHA or 5% conventional w/ owner occupied. There are also down payment assistance programs which may or may not make sense for you.

While a SFR or duplex will 9/10 be the better investment because of greater appreciation & value add opportunities, you could even look at a condo and rent out the room(s) to help w/ your mortgage payment.

Either way, you should have a significant amount of options w/ $45K to go towards a down payment + closing costs. 

Hope this helps!

@Ryan Lively

Welcome to SD & BP. We host a REI meet up once a quarter at our downtown office. Along w/ socializing and a detailed market update, I usually have a team that comes by to talk about ADUs. Everything from financing, designing, permitting, and building.

We always get great feedback. We try to make it valuable for everyone rather than just a social hangout. Sometimes there's nothing wrong with that either!

@Lee Ratner

You've received a ton of great advice so far.

In a nutshell:

• I'd recommend staying local for your first deal.
• It's okay to diversify your RE portfolio, but consider taking advantage of each area's strengths. SD's is obviously appreciation.The beautiful thing about appreciation is the market is going to do regardless of your financing. Your CF will be dependent on your financing. By coming in w/ low money down in a high appreciating market the return on your investment will be very good even if the market even continues to appreciate between 5-10% a year here. Of course, this is only 1 portion of your turn. 
• Consider leveraging debt when you can (Coming in w/ little $$ down on an owner occupied residence).
• Get w/ an expert who is familiar with zoning. Aside from renovations and strategic fix ups, you'll be able to extract value from leveraging non-optimized opportunities on the lot. Some cities are better to work in than other for this, SD City being the best IMO.

@Glen Gallo

Supply & Demand tells the story. Although we're up from .7 MSI (months supply of inventory) to 1.0 as of the most recent data, we're still in a predominantly sellers market. Things have softened a bit over the last 6 weeks. Slightly longer market times, less offers on property, and slightly more inventory. 

To address your comments above, SD's economy is bringing in tens of thousands of tech & life science careers over the next decade. It's no wonder we've had a surge of these industries coming to SD over the past 14 months from the Bay area & the rest of the Pacific northwest, Boston, NY, and even Texas. 

Two thirds of people coming to SD have a bachelors degree or higher. We are continuing to become younger, richer, and more educated. Now that our economy is really making leaps and bounds you can easily make an argument it's the most attractive place to live in the US, considering everything else SD has to offer. I believe we are San Francisco 2.0. The demand is through the roof, and as long as the supply stays low (which it is forecasted to remain so relative to our population for the next decade) we should stay in a similar market moving forward. 

I don't except to continue to have appreciation gains as we've seen over the last year. It's simply not sustainable. However, we're still nowhere near some of the most expensive city's in the US and I would expect the top 1% to continue to flock here. 

Hope this helps.

@Jesse Whitacre

Over here in SD things are slowing down just a bit, but we're still in a majority sellers market. Supply & Demand usually tells the story. We're at 1.0 months supply of inventory, the rates are still low and move are still flocking to SD that are younger, richer, and more educated. 2/3rds of everyone coming here has a bachelors degree or higher now. 

There is a ton of tech & life sciences that are making their way here because of the tens of thousands of jobs in these sectors we're creating over the next decade.