Oldest Standing Home in Laguna Beach Ca.

[Jon Andersen]

Investment Info:

Single-family residence buy & hold investment in Laguna Beach.

Purchase price: $2,750,000
Cash invested: $3,800,000

The oldest Home in the beach side community of Laguna Beach. I use to surf in front of this home when in college, so when I got the call that it was available I made an offer. After years of rehabbing properties when this came on the market the timing was right to 1031 exchange into it. I was the GC on the project and made it into a kitschy beach rental, Positive cash flow vacation rents able to pay for the $30,000 property taxes. I owned this for 2 years and sold it carrying back 75% of the $1MM gain that is still paying me interest today 10 years later.

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

I loved the beach and the chance to work on this historic property was enticing.

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

My wife was always on the hunt for a project. She saw it the day the listing came out. I knew about it from my college years. Fleetwood Mac even rented it back int their early days to jam in the garage.

How did you finance this deal?

Another Laguna Beach home that I owned for two years was ready to sell. Using the 1031 exchanged tool and a bank loan got the deal done.

How did you add value to the deal?

This R2 lot had two units on it. It was so old there were no records or plans. The 2nd unit was incorporated into the main home allowing a new structure to be built on the large lot.

What was the outcome?

$1MM in two years, some great times at the beach when it wasn't rented..

Lessons learned? Challenges?

Coastal commission, historic committees and small town building departments are miserable to deal with.