My Story - from an Accidental Newbie in San Jose, CA

My Story - from an Accidental Newbie in San Jose, CA

San Jose, CA · Member since 2016 · 14 posts · 3 votes

Hello, my name is Erin and I am married with 1 little one. I have started reading about real estate investing and it sounds pretty interesting. I am not an "official" investor or anything, in fact I kind of flipped my first house on accident. 

In a nutshell.... Bought my first house at the bottom of the market (end of 2009) and was just content to just own a house. Hubby fixed it up and it was just fine for us two. Then when I was pregnant at the end of 2013, we started thinking that we wanted to move to an area with a better school district by the time our incoming arrival would get to kindergarten. After having the baby in March 2014, I went out on maternity leave - and started looking at houses online. On a whim, I asked my hubby if he wanted to meet with a lender "just to see how much we could qualify for". That was in the middle of May. By Memorial weekend we met up with a real estate agent who she recommended, went some open houses including one that the agent just humored us with, and found a total gut job in a great area. We made an offer the next day with the contingency of us selling our house, and our agent told us we had about a 10% chance of them accepting. Well we beat out all the other offers, and they accepted. Well this was the house our agent just humored us with - it was THAT BAD - the previous owners had rented it out, NEVER checked on it, and the condition was horrendous. Anyways, so we put our house up for sale that week and it sold. We closed within a month and then we had 10 days to get it livable for our family to move in (this is with a 4 month old baby). It was crazy now that I look back on it.

Well now we replaced basically everything possible since it was a destroyed rental property and the value has shot through the roof. Of course all of that cost a lot of money, so instead of pecking away at our debt - I had another idea - why not convert our unused garage into a studio? We hired some contractors who raised the ground to house level and basically added a living space within the garage. I designed it, and it came out pretty nice. We listed it online, screened potential renters, and had it rented in a couple days. We now have a someone renting an area of our house that we almost never went in, and it is helping immensely with our bills.

All in all, during these transactions - I learned how much sense real estate makes. We would like to eventually purchase another property. I guess it's considered a "hybrid"? Get a fixer upper to rent out and keep it long term. Of course, I want to be at zero debt before starting this, but I thought I'd start researching early. :) 

Well sorry this got so long - and I hope to hear from lots of people with great advice for me!

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  • Jo-Ann LapinPro Member
    Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
    10y

    Thanks for the lovely intro. This web site is great forum for asking questions, networking and building a realiable team to work with. Happy to assist. You should source a meet up local to your area and go often and go to a investment club too

  • San Jose, CA · Member since 2016 · 14 posts · 3 votes
    10y

    @Jo-Ann Lapin Thank you - there is a lot of great information on here. I've been reading posts for the last two days until my eyes are crossing. HaHa

  • Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    10y

    Erin,

    You and your hubby are crazy.  Congrats on the baby and the timing of both purchases.  How did it feel to get all that capital gains tax-free?  :-)

    Not sure if you attended @J. Martin's summit this past weekend.  Several friends and I got some ideas out of it.  Got a chance to talk to two heavy hitters Rick Harmon and Jay Hinrichs in person too.  I had a great time.  If you didn't, plan for one in the future.

    With respect to purchasing another property, now may not be the optimal time given where we are in the cycle of the housing market.  However, there will always be deals, and there will always be people making boatloads of money regardless of where we are in the cycle of the housing market.  Only you know if it's possible.

    Happy hunting and congrats again!

  • San Jose, CA · Member since 2016 · 14 posts · 3 votes
    10y

    @Account Closed

    Thank you! Yes, I agree with you on now probably not being the best time as it seems to be at the high point of prices. We were thinking in maybe a year or so. We would like to be debt free, and we are using the rent money from our studio to pay off all our bills.

    My grandma has a couple of rental properties down in San Diego, and she uses a property management company. We saw how the prices are so much more affordable there, so were contemplating a condo or a SFH. I don't think we'll get tons of money but an extra couple hundred dollars a month would be nice.

  • Investor · Cincinnati, OH · Member since 2014 · 538 posts · 432 votes
    10y

    Enjoyed reading your story - thank's for sharing.   Here's to all your future investing!

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