Wanted to find a property that had a secondary space that could be used as a rental to offset the mortgage while my wife and I lived there. Two doors for one house = more bang for our buck.

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

2117: Found it by obsessively checking Zillow and the MLS and having an amazing agent (Lauren Valinoti)

who was able to get us in to see it as soon as it was listed. There was no negotiating as we offered over asking - we had already lost 4 prior offers and knew that's what it would take to win the house. Closed 3/15/21

2119: Unintentionally while working on the renovations for 2117, we noticed a lot of work going on next door and our realtor did some investigating - turns out they were in the middle of a flip but still off-market. I was completely determined to buy it because the houses shared a stairwell & yard, which was very weird and not ideal. We were able to work out a deal before it was listed. Closed 5/15/21

How did you finance the deal?

2117 conventional primary, 5% down, 30 year.

2119 conventional investment, 15% down, 30 year

Did you add any value?

Yes. A lot.

2117: Luckily the top unit was already rent-ready, so all we had to do was renovate the basement. Everything was from the 90s so we gutted it and put in new floors, cabinets & appliances. We did some work ourselves (thanks youtube) and hired out for the more difficult parts.

2119: Although it was recently flipped, we realized it was more of a cosmetic bandaid; we've had to fix things along the way: re-plumb sinks, electrical issues, ejector pump, etc. The fun part was having to come up with a solution for the laundry room and access to the other house. Laundry was located at the back of the house, through the master bedroom. We closed off the access to the other unit and built a closet in the master. The old laundry was now only available to the finished basement units. We then built a closet off the 2nd bedroom that opened at the hallway and put in a stackable w/d. See diagram.

What was the outcome?

Once renovations were complete, we lived in the bottom unit of 2117 and put a full-time tenant up top; our net expense was $100/mo. We also travel a lot and rented our unit on AirBnb to generate additional income.

For 2119, both top and bottom units are listed on AirBnb - they bring in consistent monthly income and we have positive CF after expenses & reserves.

Lessons learned?

Lesson 1: This is a lot of work, but it pays off and will continue to do so as long as you build systems for yourself to make problems easier.

Lesson 2: Watch spending. We went over budget with renovations by letting personal preference get in the way of seeing the property as an investment, rather than a forever home. It didn't hurt the overall profitability, but I would definitely be more mindful of this with future purchases.

Lesson 3: Don't tear your whole house apart while living in it unless you want to feel slightly miserable. Pick one project at a time.

Challenges?

When you buy a house built in the 1800s, you will encounter problems, no matter how much work has been done to it. You will have guests reach out with leaks and misc problems, people will complain about things completely out of your control, etc. It will feel overwhelming while it's happening, but you can get through it. Just fix the problem and learn from it. Ask yourself how you can improve and reduce the number of problems. As long as you are quick to respond and accommodating, chances are your guests will still leave you a great review (or tenants will remain happy).