N. San Diego County SFH with Add-on Potential

[Noah Lomax]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $524,000
Cash invested: $136,000

Found an off-market property where the seller was eager to exit. We were able to get the house $20k below market value by securing a realtor that took a reduced commission since we had arranged all aspects of the deal. The property is ADU-elligible, and the long-term plan will be to put a second unit on the lot once construction costs level out. While it is currently cashflow positive, this is where the major unlock will be.

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

The opportunity to get the house off-market, below market value, and the potential to do more.

How did you finance this deal?

Used funds from a 1031 Exchange

How did you add value to the deal?

Ran plumbing for a second, standalone unit that will be added in the future.

What was the outcome?

Currently rents cashflow positive in a market that is appreciating above the national average year-over-year.

Lessons learned? Challenges?

I wish I had been more aggressive getting a builder for the ADU rather than entrusting my realtor to manage. If I had, we would have had that unit already up and working for us. My other projects have been successful because I was extremely hands-on. This one I leaned back, and that cost me an opportunity. It was a good learning.