Historic Commercial/Office to Residential "House Hack"

[Ian Brown]

Investment Info:

Single-family residence buy & hold investment in Jacksonville.

Purchase price: $428,000
Cash invested: $150,000

Historic Commercial/Office to Residential "House Hack"

1917 historic Riverside property, zoned commercial/residential/office (CRO), used as office space since 1994. Property never in residential MLS, so no competition for purchase and was able to convert to primary residence.

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

Unique opportunity to upgrade housing/neighborhood, while drastically reducing housing costs via "house hack" airbnb rental of studio apt on side of primary residence.

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

Never in resi MLS, so bought it off of Costar listing before residential investors had exposure to the opportunity, then converted to primary residence.

How did you finance this deal?

90% LTV, 3.9% interest, 300 year amortization. Brokered on my behalf (saved 3%), plus 5% credit from seller to buyer and $7.9k repair escrow

Later, refi'd to 2.6% rate in 2020

How did you add value to the deal?

Full/Gut $150k Renovation funded from tax-free proceeds from sale of prior home

What was the outcome?

We now live in beautiful home in great neighborhood with a small studio Airbnb "house hack" that pays for 80%+ of our mortgage

Lessons learned? Challenges?

Historic renovations take a long time and not all vendors are qualified to work on historic properties. Also, historic review boards have control over some your materials on exterior of property and require special certificates of appropriateness.

Overall, BIG LESSSON is that everyone should "HOUSE HACK" because it is such an amazing financial benefit to have almost no housing costs while living in a large beautiful historic home in a great neighborhood.

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

Brokered on my own behalf