All Forum Posts by: Tom Kastorff

In fact, I would modify your entire thread title, if you can, as it does not reflect what you are looking for. 

Something like "first time VA loan buyer in Norfolk VA needs help" - that should get you far more specific thread views and comments vs what you have now, which is a bit confusing.

Lot of good advice here already. I'll be blunt, as per your original statement, you are likely at ground zero understanding of RE or lower. Nothing wrong with that. Time & Education are your best friends, make no fast moves until you are very comfortable spending money. What I would do in order:

Find a local realtor / agent, that is investor-friendly, and VA loan-knowledgeable, and spend a lot of time forging a relationship with that person (one or two have already responded in this thread, I would even modify the title of your post to include your city). They can do a lot of the immediate education to get you up to par quickly, at least at a base level. An agent will do the home search for you, and educate you on how MLS works (zillow, realtor.com, etc are just MLS aggregators, while MLS itself is a paid service for RE professionals, not much to learn there).

Find a lender to determine what you qualify for. Lending is SUPER tight right now. The agent you choose can refer you to lenders, but sometimes they have referral spiffs in mind, so do your own research through friends and family or biggerpockets vendors. I did a cash-out refi earlier this year, using a popular lender on biggerpockets, he was great. You need one specific to your city/state.

Watch brandon turner free weekly webinars on this site

Read brandon turner and david greene books, youtube videos, they post tons weekly like it's their jobs (it is)

Read lots of BP forum threads. It is amazing how much free knowledge there is for RE.

Education and time. Get started. Good luck. Tons of resources out there, mostly all free (even then, books are cheap).

@Cindy OBrien

PB is expensive, I don't see how anything would cash flow there for years, again, you'd have to read all of Dan's posts to see how he does it with his beach rentals. Most are CF negative for the first few years while gaining appreciation/principal paydown and waiting for the rent to rise up to meet costs. A house hack would help pay your mortgage but most definitely not get close to letting you live rent free unless you were stacking bunk beds in every corner.

I started investing "OOT" (out of town) - places like ski towns or palm springs, where you can get cheap condos or million dollar party pads that are super popular getaways year round and can really crush it during Stagecoach / Coachella / festival weekends. And I can drive to and use them myself. Basically this model: https://www.biggerpockets.com/...
I look at these types of investments first and foremost, because I know the markets, can use the STR myself for personal value, and they tend to be in appreciation-friendly areas. They also dip harder in bad economic markets because of the vacation home aspect, so you have to be able to weather the storms (like right now), but there are better deals as well. I am paying extra close attention, and making calls weekly, on a couple vacation rental towns just waiting for some deals to hit, and I know they are coming, just unsure if in 30 days or 6 mos.

I have started looking OOS by reading a lot of threads here, Brandon Turner's webinars and books, and determining my own investment statement / thesis as to what I want to do, where, how much, etc. Personally I would prefer properties I can drive to if needed - like the above OOT locations. Or that I can fly to easily, preferably a direct flight within a couple hours, especially if within my business travel domain so I can get to a rental location for free on a work trip. Thus from Socal that puts me to about TX as about as far as I want to go. So I have made connections in Austin TX, Bozeman MT, Vegas, and several CA vacation towns. Many on BP talk about 100k duplexes in Ohio or KC or FL but that is just not a model I prefer to explore at this time, despite "getting a lot more for your money" in theory. I don't want to have to spend days flying across the country if I don't have to, and there will be times you need to, especially up front to go out and understand the market you are investing in, which is always recommended. I hit Austin with regularity for work, so I know the market a bit and see the upside. I have no reason to go to Cincinnati OH however. Columbus Ohio is intriguing with OSU and tech employers, but I haven't explored the potential further, but there are tons of BP threads on c-bus. I have not pulled the trigger yet on an OOS investment, but have been trying hard during this pandemic to find deals and stay ready, hoarding cash. That's my methodology, there are many you will find on this site that can work.

@Alex Stewart

Good additional notes brother, these should help formulate more pointed responses from everyone.

Like others in the thread, I am from SD, thus biased. Most from here, aren't huge fans of LA (10x worse traffic, bougie'er, more expensive, etc). But admittedly I don't know enough about the neighborhoods you are calling out. The OC I don't mind, and would absolutely move to Manhattan Beach or Newport if money was no object (ie 4M) and I wanted to be on the beach and surf everyday (I did in my youth, not so much anymore). Proximity to an incredible international airport like LAX is a big bonus, as SAN is a fraction of the size or capability or quality, unfortunately we have a garbage airport for America's finest city. That being said, like you I fly for work and have zero issues flying out of SAN, it is just a C+/B- compared to LAX or DEN or SJC or OAK and so on. If you fly mainly in the west, you'll have minimal issues. If you need to travel back to Ohio or east, it could be a hassle due to limited direct flights.

Taxes down here are brutal for high earners and expensive homes (you'd pay almost $50k/yr on $4M home, unreal), for sure. Getting worse. Politics in CA getting worse. Bums are getting significantly worse. We still have $2.20-$3.00 gas while I see folks posting online from TX paying under a dollar. Insane.

For SD and proximity to airport and that budget, La Jolla is probably the best for what you'll get, it's a top 5 zip code in the US for a reason. Less than 10 or so miles down the 5 to SAN. Coronado would be risky with the bridge. A secret spot to consider would be Point Loma, it abuts the airport, has old school charm, incredible new Liberty Station mega multi-use complex of restaurants and shops, and some awesome big remodeled homes, you could get a ton for $4M. I know a lot of families buying there. I live somewhat close to this area. Tons of property appreciation here too.

Also like you I am considering NV for tax reasons and getting more for your money. Major international airport (everyone around the globe wants to gamble!). No state income tax. Lower prop taxes, lower everything. It is attractive for all these reasons if you love the heat. 3000-4000sqft homes are normal, in fact quite small in many neighborhoods. Guard gated. New, clean. I don't know as much about Henderson but it is similar to Summerlin and has great new homes and schools (hearing a lot about canyons in green valley). If you look at northwest Summerlin (Reverence by Pulte) they are right up against the mountains, with some great views of the valley and the strip. Toll Bros on the south also has Mesa Ridge, near the mtns with great views and awesome master planned community. If you don't care about the beach, this region is a solid choice. Keep in mind most of these builders do not include pools for brand new builds, you need to DIY. Buying resell is the way to go for that, and usually locks in the lower property tax rates as well (higher on new builds, weird system).

Good luck man. Let us know what else you're thinking. Hopefully other folks chime in about the LA and OC hoods.

@Alex Stewart

Nice problem to have! Some great areas. But they are very different, for many reasons. Los Angeles is huge, as you've seen many recommendations for various neighborhoods that can be fastly different. Same with OC. Same with SD. I don't know Henderson well nor have any inkling as to why you added that to a list with CA coastal beach cities.

What else are you looking for? LA/OC -can- have beaches, or not. Henderson most certainly has no beaches, but it has 90 degree dry heat and pools and the Strip along with zero state income taxes. Very different dynamics. The parameters you listed are a good starting point, but they don't really tell us why you chose these 3 cities. Or why you didn't choose, say San Diego or Summerlin. I would recommend both of those over LA and Henderson. But I am not sure why you specifically listed those towns over others.

For $4M you could live nicely in Manhattan Beach / Huntington / Newport / Laguna, if you love water and surfing or whatever.

For $4M you could live like a king in San Diego in La Jolla / Coronado / RSF / 4S Ranch / PB-MB-OB.

For $4M you could literally live in a castle in beautiful Summerlin in a brand new construction home in a gaurd gated community with manicured streets and Whole Foods and 10/10 schools nearby.

Each is likely a very solid long term investment.

What are your other main personal drivers?

Love the optimism @Kenneth Donaghy, but @Dan H. (and Ben) is right. Mostly it is "sellers waiting on the sideline" and not much else aside from barely a month's datapoints. Most of March's activity (and into April) started back in Feb, so, IMO, you cannot really use that fairly. Let's see how April, May, June look as this drags out.

I live in a nice part of town near the coast (ie a market that is more insulated from pandemic / unemployment than most). Most sellers are waiting. Many, many, listings have been pulled (I can count at least 3 within blocks of me that are NICE properties that would sell in days in normal market; and know of at least 4 others I have been following that are sitting like stones). Very little new has come on market. I know my agent very well, we talk all the time. Pickin's are slim.

Your view is skewed - "for my clients, mostly house-hackers" - that is a sub-niche of investor-minded buyers. Is that really representative of all San Diego? Is that really a "San Diego Market Update" or just "Ken's sub niche update"? Either one is fine, but let's be clear about what you're reporting on.

And sure, rates are low, but it is very difficult for the average buyer to get a loan approved right now.

So what does it tell us Ken?

Own an Airbnb STR in a CA ski town. Dead for almost two months, and the town is shut down through June 1 at the earliest. Almost everyone has left town, most businesses closed and PM's have let go of all staff who probably moved away. Hopefully they start to reopen June 1 but I am concerned at how long it will take all the supporting business (restaurants, PMs, housekeepers, etc.) to staff up to really support the tourism influx once it comes. Could be a long negative cash flow summer. Hoping the medical industry can get some control of the virus and remedies in time for a somewhat normal ski season next year, but not renewing my ski pass just yet.

Perhaps a moderator can chime in, but most business owners on this site have it pasted all over their signatures, tag line, and talk about it in responses, probably too much. Feel free to fire away, or if you feel more comfortable, PM me the info and let's chat. I had gator bits once in OKC, so a little familiar, but don't know too much about the area other than Dell has a major office there grabbing college kids and training into sales roles :) 

 What city(ies) is/are this? What is a specialist - are you an agent or turnkey operator? Interested. 

I am not sure "I would expect SD renters to be much easier to manage" - what is that expectation founded in? SD is mostly made up of non-locals that move here (think lovely patriots fans, jersey folk, etc). And entitled millennials galore. I would not say an SD renter is any better than a Vegas renter etc. Socal people in general are a different bunch, especially if you are not from here and used to the personalities.

I live in one of the first 3 SD regions you mentioned. If you want any tips or have questions, PM me. Unless you're 29 and live to surf 7 days a week driving your retro VW bus, I would advise against living in PB. Dirty, overpriced, piss on your lawn, no parking, horrible traffic 6 months a year (when the zonies come by the 100s of thousands clogging Garnet and Grand (the 2 major streets into PB). Your other options are far nicer and cleaner and give plenty of fast access to the beach. I spent 12 years in a 3/2 SFH in Clairemont and enjoyed that too, nice neighborhood right next to a large remodeled and transformed strip mall with everything you need (Target, Home Depot, 12+ restaurants) and right off Balboa that turns into Garnet straight into PB. Clairemont is probably also the most central suburb in town as you can access the 5, 52, 805 freeways all very quickly.