All Forum Posts by: Adrian Alfaro

Investment Info:

Single-family residence buy & hold investment in Yuma.

Purchase price: $149,000
Cash invested: $20,000

this house is a 3/2 with an office and laundry room on a corner lot.

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

It was sitting on the MLS for one year plus, in a good neighborhood, centrally located from all shopping and eateries. Within a 2 mile drive to the Military Base.

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

We did a 1031 Exchange, identified multiple properties to exchange to. We negotiated owner carry for 3 years at 2% with 40,000. Down. Then rolled it into a portfolio loan along with two other properties we picked up at the same time.

How did you finance this deal?

We started with owner carry back loan at 2% for 3 years 30 years Amortized. Rolled it into a portfolio loan from community bank on Year 3.

How did you add value to the deal?

Swapped out aluminum windows with vinyl dual pane. Restuccoed the house, replaced castiron with pvc, upgraded bathrooms.

What was the outcome?

We still have the property. It now has 600/month cash flow.

Lessons learned? Challenges?

Dont try and do all by yourself. Hire other trades to get the project done faster.

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

Janet Cisaneros at Black Hat Realestate Agency. She helped us locate multiple properties below market value.

im responding to this post late but i must add the town im heavily invested in and now live in. Is Yuma AZ, its located 2 1/2 hours from San diego, Los Angeles, and Phoenix. The town is rapidly growing from so many Californians moving here since Covid-19. My rents are up and property value has jumped to over 11% annually for the last three years according to zillow. I recently bought a buy and hold for cash for 79k, with an extra vacant lot that is currently being separated cause lots in town sell from 35k-55k. I want to develop it since there are currently no available duplexes on the market. The town has alot of new companies moving here from CA cause of taxx incentives and cheap labor, and comeercial space is cheaper. it does not hit alot of peoples list because of the high unemployment that comes from the agricultural sector that makes it seem like a bad economy, when in fact we have military, tourism, and ag all multibillion dollar industries. I currently do deal machine driving for dollars and have located SFR for under 100k that need work, if your interested look me up on here. Id love to help or collab.

We have one (1bdrm/1ba) in our 5 home portfolio.

The pros: It cash flows 300/m, HOA fees are 175/m includes water, sewer and trash. Built in 2006 so it has minimal upkeep. Great pool area and community hall. It was only 65k, with owner finance for 5 years.

The Cons: HOA shut down our AirBnB even though there is no mention of them in the CCR (net avg. income from AirBnB $1200/m. you can be levied with a big payment by HOA's for new roof like they did our whole complex cause they never put enough aside for cap/ex. 4500 for each unit for new roofs. ive heard of this assessment happening for pool replastering, repaving parking lot, painting buildings.

i would ask the hoa of where you are looking to buy if there any new repairs or maintenance projects coming up that could cost you, and it would be an expence that you dont have budgeted. Hope this helps. I would buy another one in the same complex but my wife was so pissed at the HOA, she will not give me the blessing.

@Emil Pinlac I have heard of problems such as, if you have a home with unpermitted rooms or garage they have to be torn down or repermitted which can be an unexpected cost. Im am not sure what the cost of ADU are per square foot up in NoCal, but here ive talked to 2 of my General Contactors(GC) that I do work for, ive been quoted between $175-200 square foot. But added expense are architectural design, Soil Engineering, but some communities have pre-approved ADU designs at no addittional cost to $500.00. Some local engineering city depatments have up to 3 designs and stream line these designs. i would recommend looking up Maxablespace.com I am not affiliated, they have good resources for ADU and jADU. Hope this helps.

A recent change to California is tri-plexing. Or adding an ADU that can force appreciation on a SFR. We currently have one house in San Diego that cashflowed well. We moved back to San Diego and currently reside in the home, I have been running numbers on our property and other local properties on the MLS that would work if we would tri-plex. With the right General Contractor you can convert your garage into a one bdrm or studio, which rent for 1100-1400, and add a ADU (Acessory Dwelling Unit) aka. granny flat. if you add an ADU for $175-200 SF and add another 700-1000 SF to your over all property can generate a rate of return of $350-425 SF of value to the over all property, plus you can rent a two bdrm ADU for $1900-2200/month, plus the primary house is a 3/2 which can rent for $2100-2500. on the high end you can generate upwards of $6100 a month, on the low end $5100/month. If you can locate a house with a decent size lot 7000square ft or more and within a mile of public transportation you can forgo adding more public parking per unit. If you finance the whole project for 600k you can have a 30/yr fixed around $3600-3800  and a propety of this size of square ft selling for $800k or more locally on the MLS. This imagery property would have a hefty cashflow, they are out there they dont last very long on the MLS. Im not sure about it working in SF or LA, but it can work in SD. if that make any sense.

if you are looking for homes under 100k that cash flow, have you looked at Yuma AZ? it is 2 1/2 hours from LA, San Diego, And Phoenix. Yuma has a population of 120,000 from the last census, but it has been expanding rapidly from fleeing Californians like myself. I moved out here 5 years ago after I bought a fixxer upper for 28k, recently sold it for 95k. We have agriculture 2.6-2.4 billion, Military and Yuma Proving Ground  2.2 billion, and tourism 2.1-1.8 billion. are our sources of income. The gem is that we have high unemployment rates, but there is a reason for that and its seasonal unemployment. I come across alot of deals, but have run out of money. We have 3 buy and Holds, and our own residence. im not a realtor or wholesaler, just a lot of opportunity for flippers and BRRRR's. if you would like to hear more reach out to me, Cheers, Adrian.

@Christopher Aaron Scali I learned alot working for flippers for a year plus in San Diego. They were all shady d-bags. The rest I have picked up on bigger pockets and one overpriced seminar. I did my 5 deals out of state and looking to put an offer on a multi family. I am buy and hold with one flip. I was lucky to buy at the bottom of the market in 2009. Plus I would never do work for a flipper again, and never have, I do my own remodels with the exception of electrical. Read the BP books lots of knowledge- find the seal and the money will come.

@Gregory Williams I use owner financing + brrrr method each of the 5 properties that I have obtained have been with 15k or less down. The first was with hard money, the second with private investor, the last three with money that was pulled out of the first two. Investors and hard money paid back, don't be afraid to pitch a project to anyone who will listen. Find a good deal and you will find the money. I have an investor now who will back me up to 200k since I have made money for him in the past and he has seen my construction background and hustle as a plus. Currently trying to put numbers together for a multi-family for my investor and I. Good luck- and hustle on.

is there a local rei meet up here in Yuma?

Im an investor here in Yuma. Im a minor league investor just closed on a condo locally and I'm using the calculator to see if I should purchase another property .  If it will cash flow well.