Investment Info:
Small multi-family (2-4 units) buy & hold investment in Vallejo.
Purchase price: $510,000
Cash invested: $57,000
This is an incredibly historic duplex! The property was built by St. Vincent's Church in 1925 to serve as their original rectory building. It was later moved across the street to make room for the new and current rectory sometime in the mid 1930's. This move was only possible because the land that the house now sits on was donated to St. Vincent's by none other than General John Frisbie. General Frisbie was largely responsible for the development of Vallejo and for establishing Mare Island as a Naval Base. Frisbie married Epifania Vallejo in 1851, Mariano Vallejo's oldest daughter. The house has since been converted to a duplex which we will renovate and rent out. The house is located in both a historic district (Mills Act) as well as an opportunity zone allowing for large property tax rebates and the elimination of capital gains tax when we sell. The duplex features a 1/1 and a 2/2 with the ability to convert the 2/2 into a 3/2 as well as add an ADU under the house. 11 ft ceilings throughout the house.
What made you interested in investing in this type of deal?
The property is located in both 1) an opportunity zone and 2) a historic district. If held for longer than 10 years, the opportunity zone eliminates the capital gains tax when we go to sell. Being located in a historic district that allows us to opt in to the Mills Act. The Mills act provides us large property tax rebates as long as we continue to upkeep and preserve the exterior and look of the property from the street. We also needed a place to live.
How did you find this deal and how did you negotiate it?
This deal was found on the MLS and presented to us by Steven Lam and his team (Julian G. and Hobie D.).
How did you finance this deal?
FHA loan 3.5% down. Total acquisition cost us $34,084.00
How did you add value to the deal?
Only half of the space upstairs is being used. By pushing out some walls into the un-used attic space we will be able to convert the 2bd/2bath into a 3bd/2bath. The current foundation has 6-10 years of life left in it. When it comes time to replace the foundation we plan to lift the house and add a 2bd/1.5bath ADU downstairs, significantly offsetting the cost of the foundation.
What was the outcome?
Still currently rehabbing the property.
Lessons learned? Challenges?
So many lessoned learned on this first deal and first rehab. the biggest take away for me personally is not to be so hard on myself when things dont go perfect. To trust the process and my education.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Rockstar agent from David Greene team (DGT), Steven Lam!
