Investment Info:
Condo buy & hold investment.
Purchased with a 1031 as a rental. Converted an alcove studio to become a legal 1-bedroom.
What made you interested in investing in this type of deal?
Multiple opportunities including build equity, cash flow, appreciation, Bonus Depreciation, HELOC/ReFi to reinvest, and more...
How did you find this deal and how did you negotiate it?
Months of personal online research to find this on market deal that offered value add opportunities. Then had my exclusive broker look it over to confirm we are on the same page. Once confirmed I let him work his magic to do what he does best! Must trust your broker. That said, purchase as first time owner direct from sponsor / developer.
How did you finance this deal?
30 yr Conventional fixed rate with significant down payment using 1031. Also some funds from a ReFi of our primary home.
How did you add value to the deal?
Used BP tools of course! At that time wasn't a BP Pro yet so I also had to rely on learning to crunch numbers quickly and effectively.
What was the outcome?
Closed in time for the 1031 with a couple months to spare. Turned the space around with conversion, staged photos and rented out in about a month and half later.
Lessons learned? Challenges?
1031 is manageable if you do your homework first AND inform all parties up front to ensure the deal will be on the right path. Also, getting financing was challenging with a less than 50% owner occupied building even though it is a condo. The development was subsidized as rental units at below market rate for a duration of time. It is now allow to market for sales to owners.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Great team including my Real Estate Broker (Jaime Ng), Legal (Maggie Hu), a good 1031 company is critical.
