First SFR Purchase and Sell

[Austin Victoria]

Investment Info:

Single-family residence other investment.

Purchase price: $805,000
Sale price: $1,095,000

My wife and I bought our first home as an investment, I represented myself as I am a licensed agent. The plan was to live in the property for two years and either rent it out or sell and invest in the next project. Due to the market and our plans to move south we decided to sell and look for our next opportunity. I did not see any value in putting money into the house due to the comps in the area. We were able to sell for the highest price per square foot in our neighborhood at that time.

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

We couldn't afford anything in the city but wanted to buy something that would eventually cash flow or give a nice ROI.

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

I checked the MLS for about 6 months everyday and this neighborhood was something we found pretty early on. There were a lot of original owners and many houses being renovated in the area. We actually put a few low ball offers in on neighboring properties, two of which were major fixers. The home was very well kept and just needed some repairs on the roof. We negotiated with the owners (also a contractor) and were able to get the work done at the sellers expense.

How did you finance this deal?

Conventional Loan, 20% down. 30 year fixed at 3.625%.

How did you add value to the deal?

The previous owners kept the home in great shape so we decided to just maintain the home as is. This was either going to be a rental at the two year mark or depending on the market we would potentially sell.

What was the outcome?

We held for two years and decided to sell and made over $250k profit and I was able to keep the buyers commission of 2.5%.

Lessons learned? Challenges?

At the beginning it was really hard for me to move outside the city. LA traffic is horrible and our friends and family were all in town so I was hesitant. 2 years flew by and in the end it was the best decision we could have made.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, myself! I work in both LA and OC, happy to connect anytime.