Logan Heights - The Spanish Mansion

[Nathan Vaughan]

Investment Info:

Single-family residence buy & hold investment in San Diego.

Purchase price: $390,000

Built in 1926, The Spanish Mansion is a sprawling 3600sqft 5bed/2.5bath Spanish style single family home with a 400 sqft garage. Since 2013 I lived in the house restoring the original hardwood floors, windows and doors, remodeling the bathrooms and kitchen. It's also been the location of my audio recording and mixing studio!

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

I loved the layout of the house. I'm an artist and musician, and at 25, was super excited by the idea of jams in the basement and a big detached garage for a painting studio and all my surfboards. Plus I was eager to get my hands dirty with a long list of DIY projects!

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

The seller was flipping a foreclosure, we bought it as-is for their asking price. We offered them cash but they wouldn't budge!

How did you finance this deal?

We had a 30 year fixed mortgage, but in 2015 paid it off.

How did you add value to the deal?

In 2020 we decided to convert the home in to a multi-unit rental property. We are looking at different strategies to leverage the significant equity in to another string of investments. Construction will likely begin early 2021 or perhaps sooner dependent on site design. We can create 4 units. Our goal is to have steady cash flow to pay for our next home mortgage + rehab cost.

What was the outcome?

TBD!

Lessons learned? Challenges?

Have a plan for the house from the beginning!!

If it's your primary residence and you're going to want to live there for more than 10 years, if you can pick somewhere you want to be.

Choose contractors very carefully and learn to manage them or find someone who can.

Spend as much time planning a project as makes sense -- don't begin until you know exactly what you're doing.

Get AS MUCH AS POSSIBLE done before you move in to the house if you're going to live there.