Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $620,000
Cash invested: $20,000
We purchased this property and retained the duplex listed prior. This is a SFH with and ADU. The lower portion of the house has its own entrance, and the driveway can accommodate a lot more residents. So we are walling off the lower portion to make it a furnished 1/1 since it also has its own living room. We will then AirBnB the ADU since we are at the beginning of a fairly popular wine trail. We inherited quite the permitting issue, so we are coughing up the time and money to make some portions of the place more legitimate, such as the ADU.
What made you interested in investing in this type of deal?
It fit what we needed at the time. Meaning a little more space than our duplex prior. We have a baby on the way and wanted something a little more private that we could still get away with "house hacking."
How did you find this deal and how did you negotiate it?
It was on the MLS. Had the Listing Agent do dual representation and was able to get a bit more from the seller in credits. At that time it was still a very hot market in our area.
How did you finance this deal?
Through myself (I am in lending) with a conventional loan.
How did you add value to the deal?
Permitting the ADU so that it is legitimate. When we purchased, they were required to disclose the ongoing permitting issue that it currently had, because a neighbor reported the seller. We believe that adding this will create more value, as well as revenue.
Lessons learned? Challenges?
Permitting departments are the worst to deal with. I don't mean to attack the people themselves, I just think that county permitting departments are set up very poorly. It makes developing, and just doing anything to a home very time consuming, expensive, and cumbersome. For very little benefit to anything...
