Have you ever wondered what it's like to actually hunt for a home? What is that process like, and how do you know when you are getting a "good deal"? Why should I buy one home, as opposed to another?
Well, we're here to share with you our own journey in trying to find and buy an investment property out in the Joshua Tree area. We want to be as straight-forward with you as possible, so we're gonna do our best to tell you the truth about what this is like! Even though we are real estate professionals, it's still a big deal and we hope to share with you the nitty gritty.
First of all, some of you might be asking, "why Joshua Tree?" Well, there are a lot of reasons. For one, Joshua Tree is a very popular, cool, bohemian getaway that is about 2 1/2 hours away from Los Angeles, where we are all based. There is a vibrant artist and music community steeped in history and neat connections, which we at TGATH are highly attracted to and have deep roots with. Secondly, prices on homes are about roughly one quarter to one half the price of a home in Los Angeles, plus you can get not only square footage, but you can also get acreage. Because of the fact that the area tends to be much more rural, GENERALLY you will not see the same type of appreciation in price or competition as you will see in major cities, but over the past two years, prices have pretty much doubled and competition has been fierce. So there's that. We are positive thinkers, so we like a challenge. One of us already owns an investment property in the desert and so there is some experience and "know-how" to draw from as well.
Ok, so the other day I was perusing my Redfin alerts as usual, and found this really cool looking property in Morongo Valley ( a neighboring town to JT ), and I thought, "oooooh this is cute, send it to the team and see what they they think". It had this cute mid-century vibe, and not only that.... a POOL. Oh my gosh, is this a good one? The list price was $439,000, which is pricey for out there, but it had been on the market for about 2 months, so I was dying 1. to hear what everyone else thought, 2. why was this on the market for so long, and could we get it cheaper?
"Isn't this CUTE?" My exact words. The response was pretty much, "yes, let's buy it". HAHAH
Soooooo, rather than make a blind offer on this property, like we highly discourage our clients from doing, I did the responsible thing and called up the agent for a quick and friendly chat to get all the details on the place. I found out a lot of cool things about the place, like the type of buyer they were looking for and why they hadn't taken previous offers, and made an appointment to go out and take a look about a week later. We were freaking out that we were going to lose out, but keep a cool head, don't get emotionally involved.
Financial aside - when you buy a property that is not going to be your primary home, you have to put at least 20% down, and the interest rate is going to be higher than a primary home purchase. So with a home like this we were going to split everything and started what's called a pro forma, which details out the budget for the project. $87K ish was 20% down on a $439K home, and we were budgeting around $65K-75K for light rehab and furnishing.
We made it out later that week and actually were able to make a little 2 day getaway out it! Bonus and side note - we got to stay in the cutest Airbnb, Terra Casa Hi-Desert, which was totally inspiring and helpful in allowing us to sort of see what we are looking for in a property.
Ok, so cut to the chase, we didn't love it, like we thought we would. Why?! Well, number one - location. When you're out in the desert you want to feel like you have some kinda beautiful view, maybe some unique landscaping, but there were a couple things that took away from the "vibe", the number one being a huge metal building in the neighboring property in the backyard. It really just kinda killed it for us. But you ask, "what about the pool?" Well, the pool was about 3 feet away from the back door and the view from the gated (like prison) pool was a gorgeous view of the giant metal silo building. Yes, there were other mountains and things, but it wasn't working. The interior of the home also needed quite a bit more work done to get it up to our design standards, so overall we felt like the location not being super ideal would not have warranted the investment needed to get this place up and running. Fyi, we probably could've gotten the price down, but just because you can doesn't mean you should. Nope, moving on.
Next up.... an all original 1bedroom / 1 bathroom cabin blocks away from the center of old town Yucca Valley. The pictures were quite intriguing, the price once again, expensive for what it was, at $319,000 but we wanted to look at it. (yes, realtors think the prices are crazy too, lol)
The property had amazing Joshua Trees, and home itself was really neat in that you could tell it was likely one of the first homes built in the entire area. Walking distance to Frontier Cafe and all the cute shops in old town Yucca.
So, what about this place? Well, the square footage of the house AND all original. We love vintage, but we don't love vintage plumbing and vintage electrical. Unfortunately, there were no upgrades whatsoever to this property and for the budget we are working with, it would not have been feasible for us to get in and do everything needed to get this property done right at a price we could afford. My guess is that it would've taken something in the range of $200K to rehab and also build an addition, and at that point it's not really the vintage cabin that we liked about it.
We did get this awesome picture in front of it though.
Photo by David Maziarz (Juliana's husband, a pro photographer)
Sooooo, we found one more also in Morongo Valley, and the more we looked at the listing the more we liked it. It was a 2 bedroom/2 bath, 864 square foot home on a bit less than an acre. I really liked the landscaping, and though it needed some cosmetic updating, it appeared otherwise like it was pretty well maintained and hopefully in good condition.
Off we go to tour this house. Let's see what it's like! Sooooooo...... we drive there, and once again.... slow deflation of the balloon, location. The location wasn't quite what we were looking for. It felt too close to neighbors believe it or not, especially since we actually live in a place where we are all pretty much within 10 feet of another person at all times. Sad, but true, we want space, a view, something that might give us the motivation to create amazing at a decent price! Not too much to ask? This wasn't quite right for us.....But we will keep looking.
Regardless, we had a couple of super fun days out in the hi-desert and we will not give up. It just takes a really long time. Onwards and upwards!