San Diego Multifamily Deal

7 Replies

Investment Info:

Small multi-family (2-4 units) buy & hold investment in San Diego.

Purchase price: $880,000

Two single family homes on a 6700 square foot lot. One 3bed 2bath and the other a 2bed 1bath. Generous lot and zoning allows for more units to be built over time. Current rent estimates with existing units though provide us good cash flow in a highly appreciating area.

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

The property offers two separate SFR that are properly separated. Property is located in a very desirable area that will bring in high rents. There was also room for improvement in the homes that will add major value right away. Also each unit offers 2+ parking spots for renters.

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

Found on the MLS. It was a unique situation where the owner passed away and his children inherited the property. They were very open to offering credits and we were able to knock the price down significantly from our original asking.

How did you finance this deal?

Through partners.

How did you add value to the deal?

Each property gets a new roof. Opening up the lay out. And adding a bedroom and bathroom to the front house. Back house gets new flooring and paint as well as a new roof. Both kitchens upgraded.

What was the outcome?

In the process of completing rehab.

Lessons learned? Challenges?

Patience. Lots of patience. We made over 30 offers and toured about 90 properties in order to find the right one. 5 months total time looking. It was very difficult at times. San Diego is a red hot market right now. Any investor-worthy property had 8-15 other offers. We learned to get creative in our bidding and the power of persistence and believing in your ultimate goal.

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

Yes hit me up if you're interested!

@Ryan Martinez The property was in "almost turn-key" I would say. There was a few foundation and roof issues that didn't need immediate attention, but because the properties are empty currently and we have the credits, we went ahead and did that. There was also some floor damage from water in one unit and carpet that needed replacing in the other unit. We also decided to do some upgrades in the kitchens and bathrooms, as well as some configuration. So by our estimation, it'll all come out to about $50-60k. This could've been a lower number, but our goal is to get max rent and hold onto it for a long time, so we don't mind doing the extra work. And the market is so competitive here that we plan to wait until our next investment in San Diego unless some amazing opportunity came up. It is currently being worked on now. 

@Kenneth Donaghy 92104. The property is right between and perpendicular to Upas and Myrtle. And were on the part of Boundary where there is about 5 blocks until the freeway going east so there is no noise pollution. And the back of the property is technically an alley but there are homes that face the alley as if it were a street. That was actually something that came up in the title search. The alley at one point was a street that was later abandoned. So that delayed our progress a little in escrow, but it was quickly resolved. I am sure that happens often in North Park with all of the peculiar streets and alleyways.

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