Investment Info:
Single-family residence buy & hold investment.
Purchase price: $315,000
Cash invested: $65,000
3/2 Condo connected to and overlooking well-groomed city park in quite residential neighborhood. Condo was turn-key and purchased as a live-in investment. Probably not the best timing to buy (at the height of the market and at a competitive price), but it made sense financially to purchase a "premium condo unit with a view" (our appraisal report literally said that) that we could cash-flow on once we started renting it out.
What made you interested in investing in this type of deal?
West Sacramento is becoming very popular due to being so close to downtown, easy freeway access, no crime, good schools, and close(ish) to San Francisco (well, closer than any other Sacramento suburb). Condos weren't our first choice, but we didn't want to spend $100k more to purchase a home smaller than our condo unit.
How did you find this deal and how did you negotiate it?
We met our realtor at the open house and he fell in love with us. We used him to put in the offer and he got it for us based on his network. Negotiations were primarily advised by him in order to get our offer (4 other's put offers down on it) accepted. We paid over asking, which hurt, but we got the deal and already knew we could cash flow at least $150 when we decided to rent it out.
How did you finance this deal?
20% down and conventional loan (note: I tried using VA, but condos are rarely accepted by VA loans)
How did you add value to the deal?
We replaced some old fixtures with nicer, new fixtures. Other than that, the house was already setup to look good and rent well (new interior paint, painted cabinets, stainless steel appliances, etc). We knew it automatically has value added due to it's location (2nd floor views of the park - other condos have views of each other in our complex).
What was the outcome?
We're currently living in the unit and saving our money for another investment (either live-in SFR in West Sacramento or BRRRR in FL or OH).
Lessons learned? Challenges?
We paid over asking price for our condo, but it appraised at $8k higher than that. It wasn't a killer deal by any means, but we knew that 1) we weren't renting anymore and 2) we could rent it and cash-flow in the future.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Steven Bloom (LYON Realtor) and Nikki Jaeger (Guild Mortgage) were ridiculously helpful and knowledgeable on our first home purchase!
