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Updated about 3 years ago on . Most recent reply

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411
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Ben Einspahr
  • House Hacking Specialist
  • Denver, CO
396
Votes |
411
Posts

House Hack Success Story | New Build Townhome Airbnb

Ben Einspahr
  • House Hacking Specialist
  • Denver, CO
Posted

I want to highlight a local house hacker that is absolutely crushing it. Vince Arena closed on his first HH in March of 2021.

Investment Info:

Single Family Townhome with a 1st Floor walkout Mother In Law suite in Wheat Ridge

Purchase Price:

$499,000

Cash Invested: $29,850 (including furnishing STR)

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

Recently Denver has become one of the hottest and most expensive markets in the country. Given the housing prices in our market, Vince wanted a way to offset his monthly housing expenses. With his crazy work schedule as a Sales Manager at a medical device company that can require him to be on call 24 hours a day, having a roommate wasn’t going to work for him anymore so having a separate unit was a must.

How did you find the deal and did you or the agent need to do any negotiating?

The deal was on the MLS. It had been listed for about 30 days so his agent, Preston Newberry able to negotiate a $5000 seller credit.

Did you work with any real estate professionals?

Preston Newberry with Envision Advisors

How did you finance the deal?

Financed the deal with a conventional 30yr fixed mortgage with 5% down, 2.5% interest

Did you add any value?

Vince added value by furnishing the MIL suite and operating it as a STR on Airbnb. However, the real value was added by Preston who saw the rental potential on this stale listing that no one else saw at the time. Without his creativity and experience he wouldn't have looked twice at this property.

What was the outcome?

Vince is still living in the property and running an airbnb out of the separate MIL suite to offset living expenses and averaging $2000 a month in rental income before cleaning fees. Net mortgage payment after Airbnb revenue is around $500 a month. He is in the process of looking for House Hack #2 and will be transitioning this property to a stabilized rental.

Lessons learned? Challenges?

On the acquisition side, he was initially only looking for a small multifamily property to house hack but pivoted to this property when he was having trouble getting offers accepted. Eventually pivoted to single family and found a great house hack opportunity with great cash flow potential.

The second challenge faced was availability of materials. Vince had to fully furnish the unit and had his mind made up on a few specific pieces of furniture for it. The furniture ended up taking almost 4 months to arrive due to COVID delays which cost 4 months of lost rental income during the busy summer season. In hindsight, realizes he should have changed course and furnished the unit with things available in a more reasonable timeframe.

Most Popular Reply

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Replied

@Account Closed to echo what Ben said, the thing I would do differently (and will be doing on my next deal) is to shop locally. Everything that I ordered online took much longer to arrive than expected, presumably due to COVID delays. Everything I went into a store to see in person I walked out with that day. If I had to go shop online for specific pieces again I would be much quicker to cancel an order that was significantly delayed and find something else. Hope this helps, and I'm happy to answer any other questions you have.

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