All Forum Posts by: Shankar Sridhar

Hey all,

I am from San Diego and looking for my first investment via House hacking. Looking to start with a FHA loan and 3-5% down.

I have looked at different properties, from condos to duplexes about the ROI when being owner-occupied and if rented out fully later.

I understand that its difficult in my market to cash flow when occupying a room/unit, but when moving out, it needs to be cash flow positive.

• This cash flow when having it as a rental property, do you typically include Capex/Maintenance numbers as well ? Because, most of the properties I see produce negative cash flow when allocating 5% for Capex, maintenance, vacancy and 10% for property management.

• Is it okay to have negative cash flow and relying on much better gains with appreciation and rent increase of San Diego market? If so, how much is the limit? 100,200$ ?
  
  Also can I factor in the possibility of removing PMI after 3-5 years by refinancing, which should free up some more returns.?

Thank you for your replies in advance :)

Yes definitely. I was looking at 5% conventional in North San Diego like Mira Mesa and little above for rental estimates.

Well, I meant, after subtracting rent, the remaining mortgage + maintenance will be about 1000$ from my pocket.
Keeping that in mind, I am not sure if such an investment makes sense despite the above pros you mentioned.

Hi Dan, Thanks for your valuable input

Yes. Actual loss would be more if I consider CapEx,vacancy, maintenance etc.
But, my goal as a first property purchase is also not to focus on cashflow, but instead direct my rent payments to a mortgage while getting back any extra profits from appreciation and equity built from house hacking.

In San Diego, If I house hack a condo, with a very low down-payment, I see that I'd have to spend 1000$ more than I would, while renting. Would you in such cases just pay rent or see taking a mortgage still a better option than renting?

@Markee Jensen, which city/town are you trying to do this? I'm from SanDiego, and looking to dip my toes in RE using house hack.

@Nicole Heasley Beitenman, I am seeing some of the condos/homes I look at, I could potentially loose 200 to 300$ after I move out. For eg. for a 2b2b in San Diego, rent is 2200$, after 2 years, it could be come 2400$, but my mortgage is 2600$ or above.
Is there a chance in the future, I could refinance it with more equity built up, thus lowering my monthly mortgage which could then be easily covered by tenants? 

Hi @Anthony Holloway , how is your search going on ? I am in a similar position as you were when you posted this thread, trying to decide if a condo would do good as future rental. Thanks

Thanks Dan. I don't mind losing cash flow if it is going to have better returns in future. Would you say the same for condos/townhomes as well? I know SFH are the best, but feel it might be a stretch to go beyond 500K-550K$.

Originally posted by @Mark Frattini:

@Shankar Sridhar

Hi Shankar, welcome to Bigger Pockets! Looks like you've starting doing some research which is great. Whenever possible try to invest in your local market first if it makes sense. San Diego is going to be a great long term play for real estate. I can tell you from experience, managing and operating property is possible but more challenging than investing locally.

Saving money by house hacking here should lower your living costs. This will most likely outweigh the cash-flow you would receive on a out of state property. You are also using more leverage by only having to put 3.5% down and not having to put 25% down. You would self manage here so you'd be saving another 13% on property management. The benefits to investing locally go on from here...

Happy to run the numbers with you if it would help.

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Thanks Mark. Yes, I would very much want to take advantage buying here in SD while I live and work here.
I would appreciate much if you can give me some pointers to help me run numbers to plan ahead.

Thanks Twana. Yes, a duplex would be ideal for me. From my search in MLS, duplex is very difficult to find here at San Diego and even if available, the prices range beyond 700k$. Will try talking to realtors.

Hey all,

This is my first post here. Loving this community!. 

I am 25 years old, working from San Diego for past 1 year after my Master's. I am on a work visa. Looking to build some real-estate equity.  Looking to purchase next year fall. I am trying to see if buying a house at SD or OOS property+property manager makes sense. 

 I am planning to stay in SD for 3 years min. and want to be renting it out later if I have to move out of state or even be prepared to move out of country as I am on a temporary work-visa.

I am thinking of a FHA loan for 3 bedroom house in SD around 600-650K$ or lower near Mira Mesa , since I work there. I plan to house hack for next 2-3 years. I know cash flow is nearly impossible, but I am even okay with paying a small share of rent while my roommates pay the major part.

Otherwise, I am looking to buy at nearby market such as AZ, Utah or Nevada as an investment property around 200K$, for which I can afford the 20% down payment. In this case, would prefer to use a property management and get some cash-flow too.

Any thoughts on how to proceed further? which route might be best for me ? 
I welcome your suggestions and insights. Thanks :)