Small multi-family (2-4 units) buy & hold investment in Pomona.
Purchase price: $565,000
Cash invested: $16,950
Duplex property in Pomona, CA. 1,576 SF of livin space with 4 bedrooms and 2 bath. Front unit have 3 beds/1 bath and the back detached unit has 1 bed/1 bath. Property was in relatively good shape but needed updating in kitchen and bath of the front unit. Purchased with FHA financing for 3% down and added $15,000 in renovation costs to update the kitchen, bath, exterior paint, and front yard landscaping.
What made you interested in investing in this type of deal?
My girlfriend was accepted into PA school at Western and we used the opportunity to purchase a home in the area that could become an investment property. The duplex was located in the center of 4 colleges which provided a great opportunity for consistent rental demand.
How did you find this deal and how did you negotiate it?
I am a Real Estate agent specializing in investment properties so did most of the deal sourcing myself. Found a great property North of the 10 freeway which helped keep the neighborhood safe compared to most areas in Southern Pomona.
How did you finance this deal?
One of my investment partners is a top producer at his Mortgage company. He was able to source us an FHA 30-year loan for 3% down with 5% interest.
How did you add value to the deal?
We added $17,000 in renovation costs to the house and received $2,000 in income from prorated rent upon close of escrow. We modernized the paint on the exterior and added landscaping paving leading up to the house. The bathroom and kitchen were fully demolished and updated to new modern styles. Kitchen originally had a small countertop so we extended the counter and added a dishwasher and microwave in the process. Bathroom tub was removed and a new modern shower was installed.
What was the outcome?
Very efficient purchase and renovation with the project finished from sending of offer to completion of renovation in 3 months.
Lessons learned? Challenges?
Having contractors on hand ready to start upon close of escrow would have helped speed up the process even more. Since this was our first project, we did a lot of on the job studying. My background in Architecture helped keep renovations going smoothly and my other partner's profession as a hedge fund manager allowed us to ensure that we were keeping in line with our finances.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I was the agent in the process. I always aim to provide a fully encompassing service that includes my architectural knowledge and experience, and in depth ability to navigate municipal codes to ensure the client understands the full capacity of the property.
Lender: David Kim @ Direct Access
Thanks for sharing
are you going to sell the property or refi and rent it out?
Nice!! Im looking to purchase in Duplex in Pomona as we speak! This will be my first one, I'm sure its going to be a great learning experience!
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