Regarding my first investment Property - Should I go for it?

2 Replies

Hello everyone!

I am looking to invest into my first investment property. It is located in City Terrace, Los Angeles. Your opinion on this would be greatly appreciated! Would you take it?

It's a 2/1 property and I will be converting it to a 3/2 property. It will go from 648 square feet to 1,150 square feet after factoring in room addition and house expansion.

My purchase price will be $430,000 (all cash, no holding costs), and I estimate $125,000 in construction costs and permits.

I will be all in at $555,000.

The comps in the market place let me know I will be able to sell this property fully rehabbed at $685,000.

My financial deal overview is also attached Google Docs Deal Viewer

Any feedback on my numbers and thoughts on taking this opportunity would be greatly appreciated. If there is any more information to provide, please let me know!

I would spend another $100k to expand an ADU. SFR/ADU in City Terrace/Boyle Heights could hit about $850k. We have 1700SF valued at $810k when we completed last Sept. The cashflow in the area could gross you $2500 for a 2B, and $2800 for a 3B.

Thank you so much for your response Victor - Adding an ADU is definitely in my plans! I'm actually awaiting a response from the county on this. At this time, based upon my research, I am not 100% certain they would approve my plans for an ADU since my property is located on a hillside without adequate parking. If It gets denied, I would consider adding a second drive way to my property which would the tenants to have 1 car in the garage and 2 on the drive way. Do you have any experience with this restriction?