Brrrr Coastal Southern California

[Kristine Cassar]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $700,000
Cash invested: $400,000

Tore down original 1200 sq ft single family residence and built a 4300 sq ft 3 family building.

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

Appreciation and higher rents in coastal areas

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

Drove by abandoned home and searched for the owner. Found it was bank owned and spent 2 years bugging the bank. The bank finally agreed to sell and had 48 hours to come up with 700k.

How did you finance this deal?

Hard Money

How did you add value to the deal?

Tore down original home and built a 2400 sq ft main home with a 1000 sq ft apartment and a 650 sq ft accessory dwelling unit. All units rent for a total of $14,500

[Account Closed]

Originally posted by @Bill B.:

They’re also getting $14k in rent? $1500 for 650sf and $2500 for 1000sf apartment (both seem high) and $10,000/mo for a house that cost less than $300k to build? (Assuming we’ll over $100k for tear down, permits, landscaping, and building the adu. 

Building in California for $75/sf? Pretty sure you could charge $150/sf, maybe $250/sf and have people beating down your door. Probably time to become a full time builder. Sweet gig if you can get it. 

 Reading this again I'm thinking 700k was the purchase price, 400k was her equity, and she hasn't disclosed the teardown/build costs which are just no way in hell gonna be 75/sqft.

Those rents are sick, but totally doable if she's truly costal in So Cal. There's 35k/mo 4 bedroom houses for rent in places like La Jolla.