What’s Right with the Real Estate Market? | Part 3
2-4 Unit Investment Properties
One of the bright spots in the dark days of this real estate market correction is multi-unit properties. They have not escaped the price declines over the past few years but unlike single family homes or condominiums they produce more income that can be applied to the mortgage payment. Purchasing as an investment or an alternative to a first home, multi-unit properties are offering buyers an opportunity not seen in San Diego for many, many years.
I wanted to let you actually SEE the numbers so below is a table with payments for various purchase prices based on 25% down, the amount required for an investment purchase. The payments below include principal, interest, and taxes (Insurance not included). Following that is another table with some example properties listed FOR SALE at the time of this post.
| Purchase Price | Down Payment | Payment @ 5% | Payment @ 6% | Payment @ 7% |
| $300,000 | 25% – $75,000 | 1550 | 1650 | 1850 |
| $400,000 | 25% – $100,000 | 2100 | 2300 | 2500 |
| $500,000 | 25% – $125,000 | 2600 | 2800 | 3100 |
| $600,000 | 25% – $150,000 | 3100 | 3400 | 3700 |
| $700,000 | 25% – $175,000 | 3500 | 3800 | 4200 |
Example Properties – Active Listings at the time of this post.
| Location | List Price | # of Units | Unit 1 Rent | Unit2 Rent | Unit 3 Rent | Income |
| CollegeArea | $261,600 | 2 | $1,000.00 | $900.00 | $1,900.00 | |
| Chula Vista | $432,000 | 2 | $1,650.00 | $1,650.00 | $3,300.00 | |
| Hillcrest | $629,000 | 2 | $2,700.00 | $1,200.00 | $3,900.00 | |
| PacificBeach | $525,000 | 4 | $1050.00 | $800.00 | $800.00×2 | $3,450.00 |
You can see based on the income produced from the properties above that they will cover your mortgage payments and in some cases offer some cash flow. If you are thinking about purchasing an investment property don’t forget to look at 2-4 unit properties, there are over 225 properties for sale under 1 million and 124 of those are under $600,000. Now is a great time for qualified buyers to take advantage of low interest rates and prices.
-Part 3 of a 5 part series -
