All Forum Posts by: Marco Felix

@Baird King

This is exciting. The first official BP Santa Barbara meet-up. Thanks for organizing and putting this together. Kudos! 

@Baird King, Great! Happy to meet local investors and even better over a beer. Thank and see you guys soon. 

Hello SB BP’ers,

Sign me up! I would definitely be interested in talking RE with some local people. I am available Thursday June 17. Thank you all for starting this. Have a great day!!

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $750,000
Cash invested: $220,000

Currently a 2bd / 1 bath with plans to convert it to a 3/1 plus a 2/1 ADU and possibly 1/1 JADU with a potential gross rents of 7,600 after construction.

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

The new ADU laws have streamlined the permitting and construction process.

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

MLS

How did you finance this deal?

Used sweat equity I built up from my first "House-Hack", ADU, BRRRR deal.

How did you add value to the deal?

By expanding the main house and also a complete kitchen and bathroom remodel, also added another bathroom to make the original house a 3/2. We also have plans to add an ADU and possibly a JADU.

What was the outcome?

I completed my first "House-Hack" deal which has allowed me to save my W-2 income since I do not have to pay for living expenses and now I am in the beginning stages of my second project.

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

I am licensed which gives me the opportunity to find off-market and MLS deals for clients and future projects.

@Mecaiah Giesy,

It would be great to share ideas! The pitfalls are similar to other types of RE investing like flipping and the BRRRR model like; finding the right property, construction cost, permitting, and especially the refinance process, if you are planning to pull your equity due to not enough comps to asses properties value.

ADU make more sense in high priced markets. I would consider just buying another property with that 150,000 or a few with 25% down. Leverage is a powerful tool.

House-hacking is the best way to get started investing and building wealth. HH is the way I got started in a very expensive Santa Barbara, CA market. It was not easy but worth the effort. You might not cover your entire mortgage but even offsetting by any portion is a start.  Best of luck!

@Elijah Brown

Incredible story, determination and drive!! Keep up the good work. I can’t wait for the book. This story was captivating and I can only imagine what the book will hold. Keep the stories coming, please.

Hello @Adam Reynolds

Awesome to hear from a Venturian! Most of my co-workers live in the Ventura area and are interested in utilizing this strategy but the numbers don't work the same because of property values. It makes more sense to spend 250k to buy another property instead of building an ADU.

I purchased the home for 810k in 2018 and it appraised at 1.25 in 2020 and I am currently refinancing again to increase my HELOC. This specific property was less expensive because I converted space instead of building new because the property allowed. I spent 120k to convert to an ADU by doing some work myself to cut cost. The total sq/ft is 1,200 3bd/2bath, which rents for 3,600.

Every market is local and it takes some studying to see what works best in your specific market. I like MeetKevins strategy for the Ventura area personally. Santa Barbara is another beast, we appraise higher with ADU's. If you want to continue discussing strategy and RE send me a private message and I will give you my phone number.

Best of luck Adam Reynolds.

Hello @Cynthia Alexandra Sanchez

I highly recommend "house-hacking" a home which you can also add value with some sweat equity, ADU possibly and even refinance most of the money invested. This type of strategy requires a great value add deal, lots of hard work dealing with city permits/inspectors, contractors, engineers and if you're willing to do some of the work yourself it can be a great wealth building opportunity. This type of deal can be morphed into the BRRRR strategy, which is what I've done and working on my second deal now that my living expenses are covered. Best of luck and keep on the journey of RE investing!! It can be dawning at times and exhilarating at the same time.