All Forum Posts by: Gabe Belloli

Investment Info:

Large multi-family (5+ units) fix & flip investment in San Diego.

Purchase price: $1,250,000
Cash invested: $400,000

We bought a mixed use property that had 1,000 sq ft of empty un-used space The 1000 sq ft of retail was being used as an illegal massage parlor and the existing 6 apartments had poor tenants. The property was poorly managed or not managed at all. Rents if collected were all done with cash with no records we being kept. Property was purchased with hard money, old tenants were evicted and property management placed solid tenants.

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

It was a very run down mixed use in a strong apartment rental market. It was going to be very challenging to do a zone change, make affordable housing units and add 4 additional living apartments.

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

Loopnet. We came in all cash and paid asking even though asking was high based on condition and rents, we knew the upside was huge. we didn't ask for anything special or extra.

How did you finance this deal?

Hard Money

How did you add value to the deal?

We evicted may tenants that did not meet the new screening requirements, we did light rehab to those existing units and got them re-rented at higher amounts, we did immediate rents raise to rest of tenants that stayed. Additionally, we evicted the commercial element which was running an illegal massage parlor and then got a zone deviation. This allowed us to make two additional apartments in the old commercial space. We went from 6 to 10 units and increased rents.

What was the outcome?

We are in escrow to sell and stand to make 34% annualized return.

Lessons learned? Challenges?

The more things your are doing to increase the value, the more money you need in reserves. Working with city government to get permits

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

Agent: Aperture Real Estate
GC: Meram Building

Investment Info:

Large multi-family (5+ units) fix & flip investment in San Diego.

Purchase price: $1,250,000
Cash invested: $400,000

We bought a mixed use property that had 1,000 sq ft of empty un-used space, 1000 sq ft of retail being used as an illegal massage parlor and the 6 apartment units with poor tenants. The property was poorly managed or not managed at all. Rents if collected were all done with cash with no records for anything. Property was purchased with hard money, old tenants were evicted and property management placed solid tenants. We are in escrow on an unsolicited offer that should close first week of Jan 2022. Once closed it will put us at roughly a 34% annualized return.

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

It was a very run down mixed use in a strong apartment rental market. It was going to be very challenging to do a zone change, make affordable housing units and add 4 additional living apartments.

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

Loopnet. We came in all cash and paid asking even though asking was high based on condition and rents, we knew the upside was huge. we didn't ask for anything special or extra.

How did you finance this deal?

Hard Money

How did you add value to the deal?

We evicted may tenants that did not meet the new screening requirements, we did light rehab to those existing units and got them re-rented at higher amounts, we did immediate rents raise to rest of tenants that stayed. Additionally, we evicted the commercial element which was running an illegal massage parlor and then got a zone deviation. This allowed us to make two additional apartments in the old commercial space. We went from 6 to 10 units and increased rents.

What was the outcome?

We are in escrow to sell and stand to make 34% annualized return.

Lessons learned? Challenges?

The more things your are doing to increase the value, the more money you need in reserves. Working with city government to get permits

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

Agent: Aperture Real Estate
GC: Meram Building

Thanks so much for the recommendations, I will be following up with those. 

We should be closing soon on the 6 unit in spring valley. Thanks again

Recently it was brought to my attention that instead of selling an apartment complex as an individual asset, you can sell the LLC which own that asset and avoid or at least significantly reduce what you owe in taxes. It was explained that this is not illegal but just taking advantage of existing tax laws. Any input would be great.

Spring valley

Hello,

Looking for some SanDiego locals who have some suggestions for asphalt and fencing contractors.  Need work on my 6 unit that we close on in 20 days!  Any help is appreciated.

Investment Info:

Single-family residence fix & flip investment in Ramona.

Purchase price: $363,000
Cash invested: $110,000
Sale price: $630,000

This was my first home purchase and was bought with the intent to do a live in flip. Most work and profit was done through sweat equity.

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

Had only small amount of cash to put down and this looked like a great deal to use FHA especially since it was a short sale

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

Through the MLS with agent. Saw it was sitting for a little bit and offered full asking knowing it had upside in the area

How did you finance this deal?

FHA and 5% down

How did you add value to the deal?

Sweat equity along with some sub-contractor help

What was the outcome?

Make a large chuck of money which was split between buying another homer to live in and then combined funds with my current partner and bought a 4 unit building

Lessons learned? Challenges?

Learned how finding the right person the first time is better than trying to get the cheapest. The challenge was I had to work a lot of extra shifts to pay for the remodel and the days I was working were additional days I could add to the back end of the project.

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

Worked with Aperture Real Estate Services for this deal and have subsequently used her for two sales, and three purchases.