First Deal - Major Rehab to Owner Occupied Duplex

[Julie Coleman]

Investment Info:

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

Purchase price: $690,000
Cash invested: $80,000

We purchased an underutilized duplex in Glendale, California in May 2018. The previous owners of the property converted the 2 bed/ 2 bath duplex into a 3 bed / 2 bath SFR. Since this property would be our first owner occupied property, we invested the capital for a 6 month rehab to convert the SFR into a high end market rental. We are using the following biggerpockets' strategies: buy and hold, live in renovation, house hacking and soon to be BRRR.

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

We were renters in Los Angeles and kept having our rent raised beyond our means. If you can't beat landlords- join them! We then saved capital so we could invest in our first owner occupied investment property. Our goal as previous tenants ourselves is to offer high end rentals to tenants who were just like us. Grade A tenants looking for an apartment worthy to call their new place home.

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

After working with an agent for months without success, we decided to switch to the agent who kept beating us on deals. The competing agent presented offers in the best way, had a great reputation in the area and knew how to close deals for her clients. We knew we had to make a change and working with the competing agent was the best move we made during our search.

How did you finance this deal?

Saved capital for many years. Invested our roth retirement earnings as well.

How did you add value to the deal?

We converted the property previously used as a single family home into an operational duplex. We spent $80,000 on a full gut rehab to make it into a high end rental marketed to grade A tenants.

What was the outcome?

We call it a success! We are no longer renters and are house hacking our first owner occupied duplex. We are anxious to move onto our second deal soon.

Lessons learned? Challenges?

LIVING ON SITE
We were lucky enough to be able to demolish the entire house down to studs, while living on site in the garage.
Pro: It allowed us to have daily eyes on site and keep the contractor and the subs honest.
Con: Living on site is a mental commitment. Make your project your number one priority so the lifestyle adjustments are worth every sacrifice.

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

Real Estate Agent = Keely Meyers of Tracy King Team and Compass (Rockstars!)