1st Real Estate Investment!

[Josh Hoeft]

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $355,000
Cash invested: $30,000

I am house hacking a 4plex as my first rental property! I live in one of the 2 bed/1 bath units and rent out a 2 bed/1 bath and 2 1bed/1 bath. I put 3.5% down with an FHA loan, and between the mortgage, homeowners insurance, MIP and taxes, I pay $2417. Add in a monthly cleaning service and paying for trash and water, and I end up breaking even every month - living rent free with building equity! I have invested close to $15,000 of my own additional money on renovations and repairs. I do my own landlording.

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

I decided in 2020 when I moved to Minnesota that I did not want to pay rent to live anymore. At this point I read as many books as I could to prepare me for my first house hack and as soon as my lease was up I closed on the 4plex.

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

MLS with a real estate agent.

How did you finance this deal?

FHA loan, 3.5% down.

How did you add value to the deal?

Performed my own renovations, increasing cashflows by $500/month. Garage repairs, renting out 2 garage stalls to tenants, renovating one of the units after removing a problem tenant, and renovating my own unit throughout the process.

Lessons learned? Challenges?

Understand if the current tenants are paying rents on time or not. Budget your renovations and call multiple handymen/contractors before choosing one. Investigate other creative ways to borrow money to free up your own capital.

[Tim Swierczek]

@Josh Hoeft you should reach out to @Richard Ochoa he has completed 8 BRRRR's in the last 1-1.5 years and is working on #9. He has found most if not all off the market. It would be worth it to buy him lunch or dinner and find out how he does it.