First Purchase in 2009

[Vickie A.]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $287,900
Cash invested: $287,900

Ugly Duck foreclosed property along LA Harbor waterfront. Holding for LA Waterfront updating which is now in progress.

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

My sister purchased in a different (better) part of the city. I purchased this because of the crash of 08-09. Better to invest when market is down.

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

I drove around in a down and out area around waterfront that I knew would be revitalized within 10 years. My realtor rep stepped in and helped me buy from the bank.

How did you finance this deal?

51% owner, mother is 49% owner....both of us brought cash.

How did you add value to the deal?

Fix the outstanding permit issues, (fix leaking gas pipe, prove basement original/make it uninhabitable) update panel, FIGHT CITY TO KEEP BASEMENT. Paint, Roof, Fencing, add ac/heat and appliances.

What was the outcome?

Property is now worth approximately $500K. {Redfin $501069, Zillow $500559)

Learned about managing tenants - YOU ARE NOT IN BUSINESS TO MAKE FRIENDS

Learned about managing "contractors" - YOU ARE NOT IN THE BUSINESS TO ACCEPT CRAPPY WORK, LIARS OR EXCUSES.

Learned how to speak to City Permit Offices - YOUR POSITIVE ATTITUDE MAKES THINGS HAPPEN.

Lessons learned? Challenges?

Boundaries. No more renting to distant family members or NICE people. DO NOT hire or maintain business relationships because you think they are nice & friendly. They are in the business to get YOUR money - not be your friend. Realize that people are not 100% on their application, LEARN how to spot B.S & if you see it, mark it, give them paper notice and immediately FOLLOW UP.

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

My agent rep was wonderful, the realtor herself she worked for sucked. I told the rep and the agent to check the city for issues because I thought I saw one outstanding. Many reminder calls and email later, the agent said the prop was clear of city issues. It was not.
I received a notice about 8 days after I closed.