East Contra Costa Real Estate Investors
Do you want some extra income or to help keep your mortgage payment down with a Real Estate Investment. Well this post may be for you. It is about buying Multi-family homes and living in one of the units.
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When I tell my friends I work with small to mid-sized San Diego income property investors, mostly everyone thinks I am talking about these guys
----- but in fact I am talking about the small investor: the at home mom, the student who has a few extra dollars to invest, the young college grad who wants to buy an owner occupied duplex or "2 on 1".
Nowadays, you don't have to be a multi-millionaire to be a real estate investor BUT you do have to do a little homework, pavement pounding and research.
Invariably when I get an e-mail from a client looking for "cash flow" on a 2 unit property it sets off a small red flag-----either one who has significant cash to put down on the property or one who is fairly new at investing. "Cash flow" is a buzz word, but it means very little in the San Diego small to mid-sized income property market. Why? Because cash flow is probably the least important of all the benefits of owning smaller properties and I'll tell you why. A 2 unit property is best owner occupied, thus allowing you, the owner (investor) a well priced place to live. Although you will be renting out the 2nd unit, the "cash flow" will help pay for mortgage, taxes, maintenance and utilities. Are you running to the ATM to deposit extra cash every month? No--------but it allows (or should allow) you to have a well-priced primary residence, thus adding to your monthly "cash flow".
Example: If you bought a $300K SFR home with a downpayment of $60K, your P & I would be about $1430. If you bought a duplex (or 2 on 1) for $400K with the same $60K downpayment your P & I would be about $2025. Assume a $1200/monthly rental income, and your monthly "rent" is $825. That's a $605/month savings, for not inconveniencing yourself a heck of a lot. You would not have to give up the idea of a SFR, because you could certainly save for it very quickly with almost $8K annual "savings" before tax write-offs of 50%! And then keep the duplex as property #1 in your investment portfolio.
In uncertain economic times it is always prudent to save for a rainy day. Starting out as a small to mid-sized real estate investor in San Diego is smart, smart, smart and a great way to get ahead of the game!
Have questions about being a newbie San Diego small income property Investor? Tenant issues? I have the answers!
Integrity-Solutions-Results
INVESTMENT SPECIALIST
Hogue and Belong Realty-Bankers Hill
San Diego, CA
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