Small multi-family (2-4 units) other investment in Jamul.
Purchase price: $550,000
Cash invested: $150,000
Purchased primary 4 bd/2ba 2200 sqft with 4 acres for 415k in Dec of 2014, built add'l house 1200 sqft 4 bd/2.5ba Additional Dwelling Unit (half bath in garage) for 100/sq ft with new septic for 135k. I have good contractor references for San Diego County. Will convert the 4 acres into vineyard with a local owner who produces great wines in Jamul. Property is located 35 min from downtown SD and 40 min from beach, 8 min from Rancho San Diego. Gross rents: 5400 and abides by 1% rule.
What made you interested in investing in this type of deal?
I work at the border full-time with the Department of Homeland Security and was looking to house-hack and have a short commute, live in the country but still very close to all of San Diego, and to do something with the large amount of land that came with the property. I initially thought about producing solar energy generation, but that is impossible in today's energy regulator environment in California. Now I plan to develop the land for growing grapes.
How did you find this deal and how did you negotiate it?
I found this deal through a local realtor and she helped negotiate the pricing since it was listed for some time, the market was slow, and the investor that bought it and renovated the house needed to get out quickly. The investor who bought it as a flip may have just broke even.
How did you finance this deal?
Conventional VA financing.
How did you add value to the deal?
By obtaining funding quickly and efficiently and closing on time.
What was the outcome?
Purchase went smoothly. Primary dwelling was primary residence for over two years and moved out to rent out primary dwelling.
Lessons learned? Challenges?
Subdividing a large 4 acre lot was not possible even though other nearby lots are 2 acres and below. San Diego County regulations are archaic and not investor/home owner friendly. Having great homeowners insurance was crucial since shortly after move-in, the plumbing was clogged and the kitchen and bath was flooded, and new plumbing and flooring had to be installed. There was very little out of pocket cost and new tile was able to be installed instead of laminate flooring.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Melissa Tucci with Coldwell Banker
How were your property taxes impacted after building the smaller dwelling? We are looking to do something very similar in Poway but concerned to how I will now be taxed. Thanks!
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