Walla Walla 4plex House Hack

[Earl Gaines]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $556,000
Cash invested: $30,000

2 Duplexes on one parcel with value add opportunity. Currently house hacking and living in one unit while fixing it up. All 3 other units are rented, with 2 below market rent, set to raise at new lease term.

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

Cash flow, opportunity for quality househack and ability to improve both the rents and add more equity through rehab of units.

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

MLS and negotiated through agent local to the market.

How did you finance this deal?

3.5% down FHA owner-occupied loan.

How did you add value to the deal?

Spend $10,000 and a lot of sweat equity upgrading the first unit and second units. Will continue the process with other units as they come available.

What was the outcome?

Living rent free with little cash ($25,000) invested in a large appreciating asset. Once I move out in 2 months the property will cash flow $800 or $200/unit each month after all expected expenses.

Lessons learned? Challenges?

Managing tenants and treating the property management as more of a business has been really helpful in keeping this property running optimally.

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

Agent: Kyle Williams
Lender: Heartland Mortgage Company