Historic Downtown Julian Multi-home Airbnb

[Jessica James]

Investment Info:

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

Purchase price: $575,000
Cash invested: $15,000

My first home purchase! House hacked for a year while living in the bottom unit and renting the top unit out as a short term rental. Now I short term rent both units house while I make the move back to Sacramento to be closer to family.

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

BIGGERPOCKETS! Knew I wanted to house hack to help me save up money for more investments and retirement.

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

After analyzing over a hundred multi-homes in San Diego County, the only one I could find under a million dollars that didn't need a total gut job was an hour outside of the city in the cute little town of Julian. It had fallen out of escrow twice due to change of minds about living that far away from town.

How did you finance this deal?

I used a VA loan with 0% down. Paid closing costs and costs of materials to update and furnish the place myself

How did you add value to the deal?

Ive added a walk way and steps down to the property. New Kitchen countertops and new appliances in all bathrooms, replaced cabinets with floating shelves and repainted all cabinets . Installed new light fixtures and flooring. Added smart thermostats and window/acs, new blinds, new flooring and baseboards, and washers and dryers. Also furnished and staged the place for short term renting and inserted cork underneath the carpet of the top unit to limit noise of stomping etc.

What was the outcome?

The place operates wonderfully as an Airbnb for short term guests. I cash flow at least $1000 to $4000 a month.

Lessons learned? Challenges?

I might have consistently cash flowed better using it as a long term rental in the long run. I spent a lot of money on cleaning supplies, utilities, sheets, etc. May still be an opportunity for later if I decide I don't want the hassle of communicating with guests and cleaners etc.Also, I had a pipe burst in my attic due to improper insulation and faulty copper pipes. I shouldnt have taken an inspectors word and had professional plumbers take a better look.

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

I worked with a rebate program called Thank You Hero's before I was a real estate agent and the saved me a lot of money. Also Caliber Home Loans gave me the best interest rate I could find at 2.75%