First buy and hold investment

[Steven Ko]

My fiancé and I just bought our first property! We just released the inspection contingency (already got our home inspector out there). We should close our contract on 5/16/19 but hopefully sooner because we paid all cash as we don’t need financing. We tried to get a mortgage and it was a pain in the ***. Just round and round we went because we didn’t have the steady income (she is 23, just got her first job and I work in the gig economy). Then this came up. Then that.

We had more than enough cash in the bank and said F it, we’re not letting a bank decide our financial future.

We ended up buying the very first house we looked at in Sacramento, CA

So here are some numbers

Purchase price : $365,000

Comps ranged from $400,000 - $420,000

Expected rent: ~$2,000

With that our repair list is quite long:we need a New roof, new garage, new hvac, new windows, replace dry rot, and paint the house. Mostly all exterior.

We knew it wasn’t a home run but we just wanted to get our feet wet. The money was sitting in a bank account getting less than 0.5%.

Now on to our contractor. A great contractor and.... he’s a family friend. We can never seem to pay him fairly. He always charges us less. But nevertheless a great “problem” to have. We just feel bad. I don’t foresee him doing this again but just as our first house he is really helping out. He lives about 1.5hr away.

I plan to take out a heloc for a 50% down payment on our 2nd home. I’m guessing I’ll buy price at about $300,000. And repeat for the 3rd house over the course of a year or two.

Havent really heard much about CA investors so give a shout if you do!!