Primary vs rental property - the biggest difference!

[Jason Pabon]

Investment Info:

Single-family residence other investment in Sacramento.

Purchase price: $505,000
Cash invested: $100,000

Bought my first primary in December 2020! This was my first "big boy" purchase I did on my own (w/ help of my partner) to establish a foundation. We bought a single family 3bd/2bath 2,000 sq ft home in Sacramento!

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

The pandemic and our first born made us desire more space. We were living in a townhome for about 3 years before and knew that we needed a bigger place for our kid to grow up.

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

Sacramento (and all markets right now) are seeing a huge sellers market! We worked with an agent for 4 mo. and we made at least 10 offers - after getting continuously let down and having to outbid 20-30k above the list price, I decided to change my strategy and go direct to the listing agent! We offered at list price and they accepted our offer. Sometimes in this market, going direct to the agent will work to your advantage. Agents will also double end the deal - it's a win/win!

How did you finance this deal?

20% down conventional

How did you add value to the deal?

New paint
New flooring
Updated master bath
New lighting

Lessons learned? Challenges?

Buying a primary is WAY different than an investment.

When you buy a rental home, you're looking for the quickest way to get a renter in there while trying to minimize cost.
When you own a primary, you have more emotion invested in the deal. You're looking to make things absolutely perfect and you don't mind spending the extra money.

When you buy a rental home, you're solely based on numbers.
When you own a primary, you're mostly focused on location.

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

Agents (direct listing agent)
Lenders (local her in Sacramento - fairway mortgage)

[Joe Bertolino]

Originally posted by @Ben Howard:

@Jason Pabon That listing agent must have an interesting relationship with their peers who have submitted (as you say $20/30k) higher offers and then find out it was a dual agency deal.

 That is my thought.  You were his best offer and he double ended it while representing the seller in his capacity as a fiduciary.  If you sold $20-30K below other offers he and his broker would be dealing with SAR ethics complaints.  Agents will strait up send that info to the seller directly AFTER the deal closes.   "He Mr. X... we offered $25K over your final sales price... just thought you should know".  I do everything I can do avoid dual representation.  I will refer them to somebody and get a referral fee but I hate representing both sides. The money doesn't matter as they trying to squeeze your commission anyway.   As Ben suggested... doing stuff like that will give you a dirty rep with other agents that ends up hurting his clients.