Buy and Hold Waterfront Townhouse

[Effrim Vee]

Investment Info:

Townhouse buy & hold investment in La Habra.

Purchase price: $406,000
Cash invested: $52,000

This townhouse is actually overseas, based in South Australia. Its a 3/2 with living areas downstairs and faces the water. A courtyard and 2 car garage complete the unit.

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

This is on the water, it has to make money...

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

Shopping the local areas and developing a relationship with a local REA's

How did you finance this deal?

Investor and bank financing

How did you add value to the deal?

We painted, changed out the floors and put in an AC.

What was the outcome?

Capital appreciation has not been what we thought. While this is in a nice area and on the water the perception of the area has kept prices depressed. It is currently on the market at AUD509k. We paid AUD408k in 2006. A gain of $100k in 14 years does not really meet our investment targets. However, it has been a decent buy and hold and rents have remained strong.

Lessons learned? Challenges?

Don't assume waterfront means capital value. That "Million Dollar View" that people talk about is not always worth a million dollars.

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

Yes and if you're in South Australia let me know, happy to share.