All Forum Posts by: Dean OMalley

@Jaron Walling, yeah, welcome to the San Diego rental market! It's pretty crazy. I was surprised we were able to get a renter in the SFR for $2900, but we actually had a number of applicants at that price point and had it filled in less than 30 days after listing. The $3500 and $4500 are projections and they're definitely on the high side for the neighborhood, but if the SFR is any indication, we feel they're pretty reasonable. All-in on the remodel/build side though, we're going to be in the $1.1-1.2M range, so it hasn't been a cheap project. My preference is still to buy out of state, where you can get a decent multi-family property for this price, but I'm taking a chance on this one, since it's my first BRRRR and I want it to be closer to home, so I can keep an eye on it.

@Brent Fosner, I'll keep everyone posted on this deal (I've been an avid BP podcast listener for years and I've gotten more active on the website lately, but this is the first deal I actually added to the site, so the interaction is new to me, but it's been great). My first real estate investment deal was almost 20 years ago, but REI just became my full-time "job" in 2017, when my portfolio was finally substantial enough to provide me with enough cash flow to live on day-to-day. As the saying goes, real estate is the get rich slow program...it starts small, but as long as you stick with it, before you know it, the numbers will start to surprise you.

@Justin R., our project is on Preece Street, where are yours? Yeah, with loan limits and valuations what they are, we're not expecting to be able to pull all the invested money out of the deal, but we're hoping to at least get close. I agree with you that BRRRR in California isn't the easiest strategy.

Thanks, @Eric Wallace, we'll see how it goes. As with any project, it all comes down to the final numbers. If expenses are a little higher than expected or the income/appraisal are a little lower than projected, it can change the results quite a bit. Fingers crossed though...hoping this will be a repeatable BRRRR process.

@Eric Wallace, the permit process was painful, to be honest. We submitted early last year, right before things shut down, and we didn't get our final approval to start construction until August, so it was well over 6 months. I think things are better now, since they have their Covid process established, but San Diego is notoriously slow for permit reviews and approvals (I learned this one the hard way). 

Thanks so much! I'm eager to get this project done (we were originally hoping to have it done last spring, but...Covid). I'll definitely post photos and full write-up when it's done. 

Zoning is R3. Property is in Linda Vista. There are a number of properties in the area where developers and investors are doing the same thing. Nice, big lots, which have enough space for multiple units to better utilize the square footage on the lot. 

Investment Info:

Single-family residence other investment.

Purchase price: $455,000
Cash invested: $650,000

My first BRRRR deal. Purchased an 800 sq ft 2bd/1ba single-family residence for $455k in 2019, which my builder partner Joseph Camile and I fully remodeled and added a bathroom (total cost: $80k). Remodel took about 2 months. Unit is now rented for $2900/mo.

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

Brandon Turner and David Greene's talk about BRRRR deals on the Bigger Pockets podcast.

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

My builder buddy found the property in San Diego and negotiated the purchase.

How did you finance this deal?

Cash deal with plans to pull cash out via a refi after the construction is done.

How did you add value to the deal?

On the back of the 8000 sq ft lot, we are building two new units: a 1500 sq ft 4bd/3ba upstairs unit and a 1000 sq ft 3bd/2ba downstairs unit. Construction was delayed, due to permitting delays from the city of San Diego, but construction is nearing completion. Total construction cost: $500k. Projected rents are $4500 and $3500. 

Hoping to cash-out refi, with a valuation of $1.5M. 

What was the outcome?

TBD.

Investment Info:

Single-family residence other investment.

Purchase price: $455,000
Cash invested: $650,000

My first BRRRR deal. Purchased an 800 sq ft 2bd/1ba single-family residence for $455k in 2019, which my builder partner Joseph Camile and I fully remodeled and added a bathroom (total cost: $80k). Remodel took about 2 months. Unit is now rented for $2900/mo.

On the back of the 8000 sq ft lot, we are building two new units: a 1500 sq ft 4bd/3ba upstairs unit and a 1000 sq ft 3bd/2ba downstairs unit. Construction was delayed, due to permitting delays from the city of San Diego, but construction is nearing completion. Total construction cost: $500k. Projected rents are $4500 and $3500.

Hoping to cash-out refi, with a valuation of $1.5M.

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

Brandon Turner and David Greene's talk about BRRRR deals on the Bigger Pockets podcast.

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

My builder buddy found the property in San Diego and negotiated the purchase.

How did you finance this deal?

Cash deal with plans to pull cash out via a refi after the construction is done.

How did you add value to the deal?

See above.

What was the outcome?

TBD.

Investment Info:

Large multi-family (5+ units) buy & hold investment in Johnson City.

Purchase price: $3,600,000
Cash invested: $720,000

Four apartment buildings in Johnson City, Tennessee...
- 10 units
- 12 units
- 18 units
- 20 units

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

My business partners and I were looking for a good multi-family property outside California, where we live, to generate good cash flow from a reasonable purchase price and strong rents.

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

Found it with the help of our broker, Paul Kenworthy, who is also one of the part owners of the property.

How did you finance this deal?

Commercial loan from Eastman Credit Union in Johnson City.

How did you add value to the deal?

With the help of our local property manager, D&K Properties, we've done a number of small value-add projects and capital improvement projects, such as new roofs, new HVAC, new fencing, signage, etc.