First Investment Property. Looking For Another

[Tim Dawodu]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $510,000
Cash invested: $195,000

Purchased a 4 bed 2.5 bath townhouse in Winnetka, CA in June 2023 as my first investment property. Renovated within 2 months and now renting for $4200. Will try and do a cash out refinance so I can purchase another property in 2024.

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

The other townhouses in the complex and area are over $650k for the same size and square footage. The place needed mostly cosmetic work and I was able to get it at a good price.

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

I found the home on Zillow originally listed for $574,900. The price was reduced to $549,00 a couple weeks late. Made an offer for $500k and countered for $510k. I was told they had cash offers right around $500k.

How did you finance this deal?

My wife and I financed it out of our pockets putting 25% down on a conventional loan. Also paid for the renovations out of pocket.

How did you add value to the deal?

Added value but renovating the entire home with new fixtures. Put in a little bit of sweat equity as well. Added extra value by opening the kitchen up a bit.

What was the outcome?

An almost brand new property which is now rented out at $4200 when others in the complex rented around $4000 or below. The place should appraise for over $700k now.

Lessons learned? Challenges?

Making sure to only send money on the most important rooms like kitchen and bathrooms. Buy modern fixtures to make the place as fresh as possible without spending too much money. Make sure up date light outlets and switches as well as door hinges and handles. That goes a long way.