House Hack #1 from 2019!

[Ryan Thomson]

Investment Info:

Single-family residence buy & hold investment in Colorado Springs.

Purchase price: $260,000
Cash invested: $10,000

Contributors:
Mark Hirleman

This House Hack lit that fire! House Hack with bedroom rentals and a garage conversion airbnb. 4 bedrooms. Lived in one bedroom. Rented the other three. Converted one of the garages into a studio kitchenette by using a 20K personal loan @10% interest for 10 years. Mortgage is $1550/month.

While living there: The airbnb netted me $1450/month and the bedrooms rented for $1800.

Now that I have moved out: The bedrooms gross $2500 and the Airbnb still nets $1400ish.

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

House hacking is amazing because it allowed me to get into the property for only 5% down.

How did you find this deal and how did you negotiate it?

My Realtor helped me find it. Saw potential for a tandem single car garage to be converted into a studio kitchenette. House was also mistakenly listed for 3 bedrooms and my realtor realized it was 4 bedrooms.

How did you finance this deal?

Conventional loan with 5% down.

How did you add value to the deal?

Borrowed 20k at 10% interest for 10 years. Converted a garage into a one bathroom, studio kitchenette with a separate entrance.

What was the outcome?

A lot of Cashflow and a lot of savings. While I lived there the airbnb netted $1450 and the bedroom rentals were $600 a room for $1800. My mortgage is $1550. You do the math and budget accordingly. The cashflow is noice.

Also in the middle of a refinance that should allow me to pull out 20-40k to put towards my next investment. House number 5.

Lessons learned? Challenges?

Double the time the contractors say it will take.
Take a risk without knowing all the answers b/c you never will.
Record all of your income on your taxes bc it allows you to cancel your mortgage on your DTI and scale.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with Mark Hirleman who is the College Rental king of Colorado Springs.

[David Mackin]

@Ryan Thomson Wow! Wow! Wow! I'd be super interested to see what your airbnb conversion looks like! Seems like you had some great ideas that saved you money and maximized your cash flow! Thanks for the inspiration!