Esmeralda Multifamily House Hack

[Steven Embree II]

Investment Info:

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

Purchase price: $750,000
Cash invested: $150,000

Officially a triplex, unofficially a fourplex consisting of three separate structures on one 10,000sf property in the hidden valley of El Sereno in Los Angeles. Two structures are single-family casitas on a hillside with the main structure being a two-bedroom home downstairs and a one-bedroom apartment upstairs.

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

The idea of a fourplex allowing me to live in Los Angeles "rent-free" was considerably appealing.

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

I found the deal on Realtor.com and negotiated via a real estate agent. This was probably my biggest fail of the deal, however, because I think a better negotiator may have been able to get a better deal.

How did you finance this deal?

I live on the property, so I was able to finance using the VA with no-money down.

How did you add value to the deal?

One of the single-families, a two-bedroom on the hill, was in bad shape, heavily settled and leaning on the hillside. I was able to have the foundation completely rebuilt and I successfully remodeled the interior.

What was the outcome?

The interior of the two-bedroom is, if I have to give myself a subjective grade, a B+ but is upgraded with quartz counters and new appliances. The property is now fully rented, apart from my unit, and I'm successfully living in Los Angeles for "free."

Lessons learned? Challenges?

Honestly, I messed up at nearly every angle of this situation. I tried doing a lot of the repairs in a DIY manner, but I ended up wasting way too much time and money. It would've been cheaper to just contract out the start to finish on the deal and would've started earning money back faster.