First Investment Property! (Buy & Hold)

[Han Pham]

Investment Info:

Single-family residence buy & hold investment in Garden Grove.

Purchase price: $570,000

First property which I partnered with my mom!

This is a very old nasty house, to the point of buying it means tearing it down and building it back up. Even though the work we are putting in is a LOT, with the amount of value we are adding in (~50%), the nice cash flow we are getting from it, and the hard-to-beat location, we believe it is worth it.

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

The location (safety, neighborhoods, employment, etc.) and the value we can add to the property are 2 driving factors why we jumped to this deal

How did you add value to the deal?

7300 square feet yet the flooring size was only 747 square feet. So obviously we add more rooms, ADU (Garden Grove allows ADU if lot size is more than 7200 square feet)
We also get to apply some "make-up" on the house and modernize the property :D

Lessons learned? Challenges?

Partnership: I believe there must be an agreed-upon on who does what or who decides on what, and that there must be an element of trust between partners!
Deal Negotiation: I'd want to be more ruthless in negotiating this deal. I love this property so much I was willing to pay a little more so I can get it. I was also worried that with such a deal if I don't get it, someone else will. Though the numbers still work, looking back, I wonder if it's smart.