Single-Family home in the desert of Los Angeles

[Andrew Kent]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $585,000
Cash invested: $60,000

The property was a single-family home that I purchased just before covid shut down the country. This is located in Newhall, California about 35 minutes north of Los Angeles. This property comes with a guest home so I had two deals with one purchase. I furnished both homes and rent them out at a premium with utilities included on furnishedfinders.com and Airbnb.com which is why am able to have such a great cash flow. Newhall is next to Santa Clarita which has been a very desirable area for families looking to set themselves up outside of Los Angeles. It was only a matter of time before the neighboring area, Newhall starts to rehab and expand for incoming families that can't afford the $800,000 properties of Santa Clarita.

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

Los Angeles real estate comes with a heavy price tag and as people move to California they naturally expand outward from the city. East, West, and South are all full up and those properties come at a premium price tag. More and more families are forced to move north into the desert which, is why I figured investing up there would be beneficial. When I started looking at properties and I found one with a guest house I thought it would pay for itself.

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

I used to work up in the area back when it was nothing but dirt lots. Years later I returned to work up there again and suddenly a city had been built up around it. It was obvious that this was going to be the next big boom for the desert communities so I began looking in the area. This particular home I found on Zillow. The pictures were horrible and the home owner was a hoarder so it was filled wall to wall with junk that made the property unappealing but it had huge potential.

How did you finance this deal?

The down payment was cash and then I did a standard conventional loan with a bank.

How did you add value to the deal?

When my wife and I moved in we had both houses repainted. We renovated the front and back yards to put in a new lawn, irrigation system, vegetation, and privacy fences. We then furnished the interiors and decorated with a new theme to give a nice desert vibe to match the surrounding decor.

What was the outcome?

The houses were fully furnished and ready for move in. Engineers that came to California on contracts and travel nurses were our primary clients as well as the occasional family that was looking for a house while there own home was being built. Occasionally I also get contacted by insurance companies looking to set up a family temporarily while there home was repaired for whatever insurance reason.

Lessons learned? Challenges?

I lived there for a time and met all my gardeners, handymen, plumbers, and electricians. I have since moved to the other side of the country and I manage this property myself. I believe that the time I lived there and got to know all these trades people is what gave me the advantage to manage the property myself from across the country and I already interviewed and vetted all my help. The only real challenge has been communicating between tenants and service men with the time zone change.

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

I worked with a realtor that was a friend from a previous career who I felt could be trusted and knew the area so I felt confident in him. He was a great contact and has sold me one of my other rentals in Colorado. He is a great realtor and I highly recommend him. His name is Matt Whal and he hangs his license with Home Smart in California and Colorado.