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Brian Moore
  • Rental Property Investor
  • San Diego, CA
60
Votes |
59
Posts

Primary Condo House Hack

Brian Moore
  • Rental Property Investor
  • San Diego, CA
Posted Jul 15 2019, 23:14

Investment Info:

Single-family residence buy & hold investment in San Diego.

Purchase price: $355,000
Cash invested: $90,000
Sale price: $439,000

Purchased a 2bed/2bath condo in Pacific Beach for my residence. Government offered Federal AND State tax credits for first time buyers as part of the recovery from the housing crisis. Initially I had a roommate for two years whose rent paid half the mortgage. I then moved elsewhere and rented both bedrooms. Sold the property less than 2 years later and was able to pocket all gains tax free having lived in the property 2 of the last 5 years.

What made you interested in investing in this type of deal?

Housing market was heading towards a low point after the 2006-2007 bubble burst and the numerous tax advantages for new home owners made it very advantageous.

How did you find this deal and how did you negotiate it?

RedFin. Once I found the deal I asked my dad (from out of the area) to act as my REA. The listing was 30-60 DOM and we were able to negotiate $40K off list.

How did you finance this deal?

80/20 conventional financing for primary residence

How did you add value to the deal?

The condo had an awkwardly small living room so we moved a wall to add 25-30 sq ft which didn't impact the bedroom all that much. Before sale I spent $10K in make ready to fetch top dollar.

What was the outcome?

Sold for substantial tax free profit, used proceeds to finance down payment on my current residence.

Lessons learned? Challenges?

I did learn a hard lesson on the State tax credit being offered. The stipulations were that I live in the property for the first THREE years, not TWO. I ended up having to reimburse the government with the $10K tax credit! All in all it was still a positive experience.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My dad!

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