SFH with ADU

[Melissa Gomez]

Investment Info:

Single-family residence buy & hold investment in Miami.

Purchase price: $490,000
Cash invested: $100,000

We built out a studio in the garage we also started renting.

What made you interested in investing in this type of deal?

I was looking for a multi-family unit so my mom could have an affordable place to live. However, even with house hacking, she couldn't afford to pay the amount for her unit in a multi-family unit. So we bought this home in an up and coming neighborhood and converted the garage to a studio, which was more affordable for her.

How did you find this deal and how did you negotiate it?

The house was super ugly lol. It was hot pink! I have to find the original pictures. The owner had been there like 45-50 years and needed to sell to relocate to Virginia where he had family. I explained to his realtor that I respect the owner, being one of the original owners in this black historic neighborhood and want him to be able to move to Virginia. I said I'm not going to ask for any credits for cosmetic things, just enough to make the place safe to live.

How did you finance this deal?

I got an FHA loan because my mom was on the loan and she has never bought a property. I received $17000 in credits and put my commission as a realtor down as well. I ended up going 4k out of pocket between downpayment and closing costs which was great.

How did you add value to the deal?

I worked really well with the seller and the seller's agent. I didn't make them feel like they were selling me a dump and they appreciated that and ended up giving me more than I anticipated because of it. In terms of the house, I did renovations. Got a new roof, new paint, remodeled the kitchen, one bathroom, and converted the garage to a studio. Put up a fence too. Can't remember what else, but it was more than I planned for! lol

What was the outcome?

I got an amazing renter for the 3/2 side of the home. I had listed it on zillow but forgot to put the sign up in front of the house. It was the sign that got the renter not zillow, so old school still works! My mortgage is $3600 and I collect $4350 in rent.

Lessons learned? Challenges?

I learned A LOT about renovating a home! It's a terrible process lol. I learned how to better budget for a renovation and how to pick a better team. My reno came out great but over timeline and over budget which was not great.