First Partnership and New Construction

[Jaime Topete]

Investment Info:

Other buy & hold investment in Buellton.

Purchase price: $600,000
Cash invested: $30,000

I live in this property with a coworker. We purchased this home together as owner-occupied. We turned live in the mother in law unit and rent out the 3 bed 2 bath portion.

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

This was the first new construction near Santa Barbara. (first in my budget haha)

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

My girlfriend's boss showed me the units; he purchased the same model.
I did not negotiate since the new construction price was pretty fixed ( a lot of units sold at a certain price)

How did you finance this deal?

My coworker and I went with a conventional 30 year.

How did you add value to the deal?

We temporarily blocked off a wall inside the units to make the granny unit and 3 bed 2 bath section completely separate.

What was the outcome?

We have happy tenants upstairs that cover most of the mortgage. We plan on leaving in a year.
I will keep buying as owner financed, live there and move out.

Lessons learned? Challenges?

New constructions will not be completed in time.
I made the mistake of renting out (no signatures yet) the condo based on the expected construction date.
The rain came and delayed the process, luckily the tenants were understanding. We lowered their rent as a result.

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

No agent needed for new construction