House Hacking A Duplex as My First Property (Start to Finish)

[Lili Thompson]

What’s up BP!

This is my first real post, and I’m so excited that I can finally say I’ve got my first investment property! Thanks to everyone who has answered questions or provided insight during this process.

The wild thing about this property is that THE CLOSING TOOK ALMOST 90 DAYS!

89 to be exact!

In this post, I’m going to outline the process for all my fellow newbies out there. I also made a separate post here (https://www.biggerpockets.com/forums/12/topics/818360-my-house-hack-took-89-days-to-close) that goes more in-depth, detailing exactly why it took 89 days to close.

If you don’t feel like reading, you can check out the video-version of this post here: https://youtu.be/91OiRc3Xsww

You can also see the video-tour of the duplex here: https://youtu.be/Q6qd4SoMza0

Alright, let’s get to it!

This property is a 2,500 square foot, up-down duplex. 97 years old but freshly renovated and in beautiful condition. Located in one of Tulsa’s hottest neighborhoods, there are 2 bedrooms, 1 bathroom in each unit, full kitchens and laundry in both units, and separate utilities.

Finding the property

My criteria: 2-4 units in one of 3 neighborhoods close to downtown Tulsa.

How long did it take to find?: 3-4 months! The inventory of multifamilies in my desired areas is really low.

How’d I find it: Searched “duplex” in Zillow and saw a new one had popped up just 17 minutes prior. Went to view it the next day.

How’d I negotiate: I offered $6k below asking price then and there, ready to sign (had my pre-approval in hand). We settled on a $5k reduction and each party paid their own closing costs.

Why was the closing so long?

Reason #`1: The sellers actually listed the property as “coming soon”, because they were about 85% done with the renovation. Instead of the typical 30 day, we extended the contract a bit to allow them time to finish up.

Reason #2: I ran into a HUGE hurdle with financing because I had a non-occupant co-signer in my dad. This is something I don’t see people talking about a lot, but it can affect a ton of newbies who want to house hack. Post about it here LINK.

• November 17th Contract Signed
• January 3rd Initial Closing Date
• February 13th Actual Closing Date
• 89 day closing!

Finally closing

After multiple appraisals and going back and forth with FHA underwriting, the property was officially classified as a duplex, and because I had a non-occupying co-borrower, that took my required down payment from 3.5% to 25%!

In order to get the property classified as a SFR and pay 3.5% down, I had to combine the electric meters and "remove" the upstairs kitchen (meaning disconnect the dishwasher and oven and put them in another room), so that the upstairs kitchen would then be classified as a "laundry room with sink".

Yeah, I know. Again, more details about that process here: https://www.biggerpockets.com/forums/12/topics/818360-my-house-hack-took-89-days-to-close

OHFA Downpayment Assistance

Although I had the funds for the downpayment and a 3 month emergency fund, I decided to use Oklahoma’s DP assistance fund. First-time buyers (and low income earners) can get their DP gifted (no paying it back!) to them from the state.

I added the money I would’ve spent on a downpayment to my emergency fund, and had a check from the state waiting for me at the closing table, it was a pretty awesome feeling. If you want to see if your state has a DP assistance fund, check out this link here: https://www.hsh.com/homebuyer/dpa-guide-down-payment-assistance-all-states.html

Let me know what you think!

You can see a tour of the property here(https://youtu.be/Q6qd4SoMza0), let me know what you think, and don’t forget to leave a comment letting me know you’re from BP.

Lili <3