Updated over 3 years ago on .
Harbor Area Duplex - Bandini
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Classic 1920's harbor area 960 SF duplex that was a fixer on a 4,500SF lot. The building was unoccupied when we bought it but is in a good rental market with plenty of room in the backyard and backyard alley access for a potential ADU. The San Pedro area is a charming, older community 25 miles from downtown Los Angeles adjacent to the Los Angeles/Long Beach Port Complex.
What made you interested in investing in this type of deal?
We were looking for a value add deal where we could utilize our construction experience to rehabilitate the property and we were looking for a smaller older home with a large backyard sufficient enough to build an ADU. We were looking for a property we could buy, fix up and hold.
How did you find this deal and how did you negotiate it?
We found it on MLS. It was a probate sale and had fallen out of escrow twice.
How did you finance this deal?
Conventional 30 year finance with 25% downpayment. Downpayment was from savings. We used money from savings to pay for the rehabilitation costs.
How did you add value to the deal?
Our family did the general contracting work and performed much of the work ourselves. The renovations took about three months to complete. We completed structural upgrades to level the floor, new roof, new windows, bathrooms were completed gutted and rebuilt, refinished the cabinets, new countertops and new lighting and plumbing fixtures, and painting complete on inside and outside.
What was the outcome?
We leased the units in a couple weeks following listing to two very good tenants. We are still developing the plans for the ADU in the backyard and are planning on starting construction sometime in 2023.
Lessons learned? Challenges?
- We should have started the ADU immediately after completing the renovations to the duplex. We lost some momentum once the duplex was rented.
- The insurance company gave us a couple months to complete all the repairs before they would cancel the hazard insurance on the property. This would have been a problem if we weren't doing much of the work ourselves.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Bobbie Franco, Real Estate Agent, 310-930-6053
Joe Gomez, Mortgage Broker, 310-293-9328
