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Hello Investors,
🔥 THIS WEEK
San Diego House Hack: $72K down (5%) owns $1.45M, rent 3 units $6,758/mo, live free building $55K/yr equity
Napa Foreclosure Duplex: $47K down owns $949K Wine Country, $2,500/mo rent offsets, $40K/yr equity
KC Midtown 4-Unit: Strong 7.6% cap (6.5% CoC) but self-management mandatory in Plaza location
Spring Valley 48-Unit: Massive $5.6M down for weak 2.4% CoC BUT $11M appreciation play over 10 years
🏠 San Diego 4-Unit House Hack - $72K OWNS $1.45M BUILDING $55K/YR
📍 320 Willie James Jones Ave, San Diego, CA 92102
💰 Price: $1,450,000 | Down: 5% ($72,500)
🏠 Mix: 2×2BR/2BA + 1×2BR/1BA + 1×1BR/1BA, Fully Renovated
🏦 Live in 1BR, Rent 3 Units: $6,758/mo income | Out-of-Pocket: $3,661/mo
House Hack Economics:
5% Down Owner-Occupied | |
|---|---|
Purchase Price | $1,450,000 |
Down Payment (5%) | $72,500 |
Loan @ 6.5% | $1,377,500 |
Closing Costs | $43,500 |
Total Cash Required | $116,000 |
Monthly Housing Cost | |
|---|---|
Mortgage + Taxes + Insurance | $10,419 |
Rent from 3 Units | -$6,758 |
Net Out-of-Pocket | $3,661/mo |
Market Rent for 1BR | $2,100/mo |
Premium for Ownership | $1,561/mo |
Wealth Building Reality:
What $1,561/mo Premium Buys:
Principal paydown: $11,000/year
San Diego appreciation (3-4%): $43,500-58,000/year
Total equity gain: $54,500-69,000/year
Net wealth: $35,000-50,000/year after housing premium
Your 3 Rental Units:
Unit 1 (2BR/2BA): $2,500/mo
Unit 2 (2BR/1BA): $2,300/mo
Unit 3 (2BR/2BA): $1,958/mo
Total: $6,758/mo ($81,096/year)
Property Features Creating Premium Value:
10 parking spots (2 per unit) - rare SD asset
New roof (turnkey condition)
New asphalt parking lot
Dual-pane vinyl windows throughout
Fruit trees: guava, avocado, tangerine
Two locking storage units
Auto irrigation system
10-Year Wealth Projection:
Additional cost over renting: $187,320
Equity from appreciation (4%): $694,000
Principal paydown: $130,000
Total equity gain: $824,000
Net wealth created: $637,000 (3.4X return on premium paid)
Future Exit Strategy (Move Out):
All 4 units at market: $9,800/mo ($117,600/year)
Cash flow: -$1,376/mo (negative but building equity)
Becomes pure appreciation hold
Year 10 value: $2,144,000 (+$694K)
Risk Level: MEDIUM - Requires $3,661/mo stable income, landlord duties while living on-site, negative cash flow if convert to full rental, but extraordinary wealth building justifies
Recommended Strategy: STRONG BUY for W-2 professionals with stable income, pay $1,561/mo premium over renting to build $55K/year equity in $1.45M SD asset with only $116K down
When it all clicks.
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KC Midtown 4-Unit - 7.6% CAP BUT SELF-MGMT MANDATORY
📍 4244 Terrace St, Kansas City, MO 64111
💰 Price: $550,000 ($137,500/unit)
🏠 Mix: 1×3BR/2BA + 3×1BR/1BA, Recently Remodeled
🏦 Year 1 CF: $7,971/yr (6.5% CoC) | Cap: 7.6%
Key Metrics:
Critical Numbers | |
|---|---|
Down Payment (25%) | $137,500 |
Total Cash Required | $154,000 |
Annual NOI | $42,070 |
Year 1 Cash Flow | $7,971 ($664/mo) |
Year 1 CoC (Self-Mgmt) | 6.5% |
True Cap Rate | 7.6% |
Expense Ratio | 23.1% ✅✅ |
NOI Margin | 76.9% |
Debt Coverage | 1.31x |
Exceptional Expense Efficiency: 23.1% operating costs versus 35-40% KC average due to tenant-paid utilities, minimal common areas, creates 76.9% NOI margin rarely achieved boutique multifamily
Midtown Plaza Location Premium: Northwest of Country Club Plaza walkability, restaurants, entertainment, mature trees, professional tenants willing to pay premium rents for location quality
Recently Remodeled Turnkey: Hardwood/LVP flooring, modern kitchens, in-unit washer/dryer all units, window AC units, Google Fiber, off-street parking eliminating immediate capex
Current Market Rents:
3BR/2BA premium unit: $1,650/mo
1BR/1BA units (3): $1,050/mo each
Total: $4,800/mo ($57,600/year)
Value-Add Opportunity:
Water fee recovery: $40-50/unit adds $2,040/year
3BR unit push to $1,750-1,800 with minor upgrades
Central AC installation could justify $50-100/mo premium
Self-Management Critical: 6.5% CoC assumes owner self-management, professional property management 8-10% reduces returns to 3-4% making deal marginal, only works hands-on
10-Year Wealth: Cash flow $152,417, principal $73,813, appreciation $140,000, total profit $365,753 on $154K invested = 137% return (13.7% annually)
Risk Level: MEDIUM - Self-management mandatory for acceptable returns, window AC not central air limits rent ceiling, four-unit concentration risk, but Plaza location and expense efficiency mitigate
Recommended Strategy: STRONG BUY for self-managing investors comfortable hands-on, exceptional 7.6% cap with 23.1% expenses creates 76.9% margins, Plaza proximity at $137,500/unit strong value