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Updated almost 6 years ago,

User Stats

34
Posts
8
Votes
Kayla Elliott
  • Foothill Ranch, CA
8
Votes |
34
Posts

Southern California 2/2 with low money down and low money in

Kayla Elliott
  • Foothill Ranch, CA
Posted

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $375,000
Cash invested: $18,750

This is our main residence (and first deal!) which we purchased for 375k in April of 2017 which was about 25k under market value and is now worth about 435k as of December 2018. We put some money (about 10k) into the renovation of the house and replaced all of the carpet with wood-faced tile as well as replaced the cabinets and countertops in the kitchen, both bathrooms, and added a small dry bar area. The place is a 2bed, 2 full bath carriage unit that shares only one wall and sits above garages.

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

This deal was off-market when we picked it up. We found it because an offer we had put in on a different unit didn't get picked and our realtor reached out to the sellers realtor and asked if he had any other similar properties.

How did you finance this deal?

We utilized the Chase Dream Maker loan which was 5% down, 30-year fixed rate at 4.375%.

How did you add value to the deal?

Without realizing that this was our first "deal" we replaced all of the cabinets and counter tops with granite and top-of-the-line products. Given that we are almost ready to move out, I would have chosen cheaper materials. We also decided against replacing the carpet with carpet and instead opted for a sturdy tile from Home Depot that imitates wood.

What was the outcome?

We are about to request PMI be pulled off from the lender as the house has appreciated in value to 435k from 375k in the past two years. Once that occurs, we believe that we will be able to rent the unit at cost or slightly below. We will plan on refinancing every two years to bring the monthly payment down so that way there is more room for cash flow.

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

Highly recommend John Babai from Meridian One. He always had our best interest in mind and being a first-time home buyer, he made the process about as easy as you could have by pointing out the flaws in all of the units that we saw, and explaining every last detail of the house down to the material, style of year built, etc.