We actually lost out on getting the property the first time around. They chose another buyer who offered more money. But that fell through and the seller chose to give it to us, thanks to a super personable letter I wrote :) There were even other offers higher than ours! I remember being in the car on my way to bowling and getting the email. I was super excited!
The paperwork to purchase a house is ridiculous. It was my first time acting as a buyers agent, so I had to learn through the process. There were so many forms, signatures bouncing back and forth, and document verifications - it seemed endless! I am really lucky to have been able to jump straight into a deal with my salesperson license, as doing an actual deal gives you the experience and knowledge to work in the actual industry.
FINANCIALS (if you’re interested)
I owe a lot to my parents for helping us and encouraging us to get involved in real estate. My parents themselves came to America with pretty much zero money, and today they own quite a few properties and rentals. Real estate is lucrative, and if done right it can help build wealth equity and pass as a great investment. The interest portion of mortgage payments and property tax is also tax deductible. They encouraged my sister and I to begin at an early age, and they were also instrumental to our ability to secure this property. The way it works in many of these hot markets is like this: all-cash offers typically win because there is no need to get lending approval and such. Without cash, it will be hard to get a great deal on a home. My parents had the funds necessary to put down an all-cash offer 60k more than asking price, which is what it took to get it. We are in the process of doing a refinance, meaning we will get a loan on the house and most of the money will be returned to my parents. They will be giving us a 200k loan for the down payment, that we are paying off to them in 5 years. In addition, we will be responsible for the mortgage payments. All in all, we would not be able to buy our place without my parents’ help. So they made this whole thing possible. I guess they really love us!
In summary, here is a rundown of the financials: Parents paid full price for the property in cash (691k). They will receive the full 691k back within 5 years. About 491k of that cash will be paid back in the next month through the refinance process. The rest (200k) will be paid back over these 5 years by my sister and I. My sister and I paid for the cost of renovations (about 21k each), and we have property taxes (about 10k per year) and HOA fees (250 per month). Since the refinance will be based on the new appraised value, we also pull out as much equity as we can (risky) to invest it in business opportunities.
We closed escrow on July 10th, and so began the renovation process.
RENOVATIONS
We knew we were going to have to change pretty much everything in the house. You saw the pictures right? That was not going to fly. My mom flew down to LA and we talked to a few general contractors. It seemed like it was going to cost around 80-100k to get the work completed. Since my sister and I were paying for the renovations ourselves, that was too expensive. I decided to act as my own contractor (which saved us A LOT of money in the end) and hire out each separate job to different crews. This became the most adult and hardest project I’ve ever worked on, but also one of the most rewarding experiences I’ve had.
Here are pictures showing the various stages of renovation that the place went through. It was a roller coaster - some days, it would look great and as if it were coming along. Other days, it would be back to being nasty and a full on construction site.
