Where they're buying: San Diego
Number of properties: 5 multi-unit properties
Over the past eight years, retired biochemical engineer Thomas Gawronski has been building up a tidy little empire in San Diego's beach havens. He currently owns five multiple-unit properties -- and he's looking to expand.
When assessing a property, Gawronski looks for immediate returns that will bring in enough rent to cover expenses, plus a little extra.
That can be a tall order in San Diego's Ocean Beach and Pacific Beach neighborhoods where homes are still expensive, especially when they are located near the water. But Gawronski knows what to look for.
The last three homes he purchased were in Ocean Beach, a hip, unspoiled community that reminds older Californians of what beach towns were like in the 1950s and 1960s -- except for the prices.
Gawronski managed to land a deal on the three 500-square foot cottages, paying a relatively low $455,000 total for all three units, down from the original listing price of $495,000. Online real estate estimator Zillow calculates their worth at more than $650,000.
Located just a block from the beach, the units were bound to bring in some good rents, but they needed some work first: The cast iron drains in one unit's bathroom had rusted away and waste was streaming right onto the ground. And the pine floors in two of the cottages had buckled.
Gawronski worked with his agent Elleene Douglas, from Coldwell Banker Residential, to get the bank that owned the property -- it was in foreclosure -- to take $40,000 off the top to pay for the repairs.
Gawronksi rents out all three places for a total of $3,450 a month. After mortgage payments ($1,700 a month), property taxes ($400 a month) and other expenses, such as sewer and water bills, he walks away with a 6%, or $900, profit each month. And that's only one of his investments.
NEXT: Julie Fine
