Fix N Hold - Investment Portfolio.

[Jeff Chen]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $180,000
Cash invested: $210,000

During 2008 housing crash, we saw multiple 4bd/2ba home in San Pablo with a huge 7,500 sf lot sell for $180k, and continue to drop to $120k - the price of a home that was well below the cost to even build a home (less than $127/sf.) At that time, I encourage a lot of our family and friends that this was the time to buy real estate when everyone was trying to let go of their homes. The value of the home and the lot size was beyond what I have ever seen in the Real Estate Market, I wish I had the cash to buy more. Currently still own the property now valued over $550k with a positive cash flow of $30k/year. Put in about $30k to remodel the property. See Before and After pictures - need to upkeep the lawn. lol

Current

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

Home prices were below the cost it was to build a home, you were almost getting the land for free. Great rental income! Where else can you write off your depreciating asset while in fact it is appreciating!?!

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

As a realtor, I found this deal on our bay area multiple listing service, and negotiated with the seller.

How did you finance this deal?

1031 Exchange - cash exchange from an investment property I owned in Firebaugh, CA

How did you add value to the deal?

Rehab'd the home, got it ready for rental. Have been renting it out since 2008. 2nd update in 2018 (new paint, new flooring after renters damaged old pergo floors - went with 100% vinyl flooring with lifetime warranty.)

What was the outcome?

Right now, home is valued at $550k - tripled my initial investment.

Lessons learned? Challenges?

Wish I had bought more. Probably should have did a cash out refi, and bought another home. Leverage the cash, but keep 20% equity in the home. Challenges? pick your renters wisely, don't try renting out room rentals, rent out as a whole house.

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

I worked with Jeff Chen - he was my real estate agent - 650-222-6682. - LOL I'd recommend myself, but if you need help anywhere in California, I know a network of agents in that area that can help you find off-market deals as well.