2012 Purchase Providing Equity for Further Investment

[Charlie S. Webster]

Investment Info:

Single-family residence buy & hold investment in San Diego.

Purchase price: $194,000
Cash invested: $30,000

One bedroom, one bath 2012 $194k Short Sale, appraised originally $230k, 5% down initially with PMI. PMI since removed. Appraised summer 2018 $350k.

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

I'm military and transferred to San Diego after the market crash specifically with purchasing a distressed property in mind.

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

Real Estate agent was offered before property placed back on the market due to previous buyer impatience awaiting Short Sale going through.

How did you finance this deal?

5% down conventional loan.

How did you add value to the deal?

I haven't. I have changed virtually nothing about the property, and I don't anticipate needing to. It was in good shape upon purchase.

What was the outcome?

I still have the property. After property management fee, PITI, and HOA, it cash flows $350/month. I have since taken out a HELOC which I used/am using to buy/renovate a single family home on Oahu.

Lessons learned? Challenges?

Cash flowing in San Diego is quite difficult. The only reason this property does is because I bought it at a low point in the market as a short sale. If you're investing there now, I recommend House Hacking a fixer upper and turning it into a multi unit if possible. I am doing this with my current project in Oahu, HI.