I don’t normally post much on social media but I thought this will be useful for many other your investors and will hopefully inspire them to do something similar. This is a long post but I though the entire experience was worth sharing and not just the result. For those few who invest the time to read the entire post, I believe you will find lots of value and see what it takes! This is rarely shared in podcasts and post. People normally only share the final result/numbers.

When I started looking for a Househack I had the following goals:

- Live for Free! Utilize the additional unit/units and use the rental income to cover your mortgage payments, all expenses for all units including mine and hopefully leave some profit.
- Pay $0 to acquire the home! Use FHA Loan with 3.5% Down Payment, Utilize Agent Commission of 3% towards the down payment, ask seller to pay Closing Cost and Pay $0 to acquire the home. Finance Renovation and use $0 from your own capital. This was inspired by the book Rich Dad - Poor Dad by Robert Kiyosaki.
- Buy a Multifamily! Preferably looking for Duplex, Triplex or Fourplex. A SFH with Mother In-law suite could have also worked.
- AirBnB Allowed! Desirable Area which legally allows Short Term Rentals.

I managed to achieve 3.5 out of the 4 goals!

Shortly after I got pre-approved and started looking for a suitable property I realized how crazy this market is and what my main challenges would be! First of all, no one was accepting FHA offers, especially for Multifamily units. Sellers preferred Cash or Conventional Offers. Secondly, the competition on this market was ferocious. I was going for showings where I had to wait in line with 30 other potential buyers just to take a look at the home. All Duplexes were on the marker for 48-72 Hours before going pending with dozens of offers, multiple back up offers and shockingly good terms for the sellers.

To be honest, at that point I had thoughts about giving up and settling with a regular SFH or a condo and I considered other strategies. Luckily, there was a property which I went to visit and I really like and I almost managed to get it under contract. I got outbid by a Conventional loan at the last second, right before the seller signs my offer but for me that was a sign of progress. This is when I decided to adjust my approach when it comes to reaching out to the agents/seller. I can write another huge blog just on this topic by I will save that for another time. In few short words, I started betting on building a rapport with the listing agents & sellers, expressing how motivated I was and what it would mean to me if they accept my offer and in this way showing them I will be taking this deal to the closing table if they decide to work with me.

Shortly after that adjustment, I started having more success. I got a property under contract only about a month after that. This was a beautiful SFH with a Mother in Law suite on half an acre with a nice small creek going through the property. I was in love with that home and I had some many great ideas of what I would do once I close. We got so close, we were only 7 days away from closing. Unfortunately, the agent and the seller were not very honest in that transaction. We found many issues with the home including non-permitted work, issues with the septic tank and even some illegal things the seller was doing. I had to pass, take another defeat and keep looking! It ended up working out for the best!

Not too long after that home fell through, I saw a price deduction on one of the properties I was keeping an eye on. This was a gorgeous duplex, in an area which allowed short term rentals. The problem was that it was initially overpriced. The seller was asking for $404,000 and in my opinion the home was worth about $350,000-$360,000. I was in touch with the agent from the very beginning and I had told him exactly what I’m trying to do. He was an investor himself and he mentioned that his buyers are also investors, and they liked my story. I placed a verbal offer however, after talking to the sellers the agent said they would rather wait for a better offer. Eventually the sellers reduced the price to $369,000 few months later. I kept being persistent, kept in touch with them for 3 months and eventually managed to get an offer accepted for $356,000. I also negotiated the electrical panels to be replaced and the seller to cover the cost. The cost of that repair was $4,500. I was not able to get them to pay for the closing cost but this was something I could compromise on. It is worth mentioning that the home was in a perfect shape, all big tickets items were in good condition the only downside was that it was just very outdated. Most importantly both sides were vacant which is a unicorn in this current market when it comes to Multifamily.

As we were getting closer to closing, we ran into a big issue. The appraisal from the bank came back at $336,000 which was much lower than expected. At this point I thought the transaction is lost. The seller did not want to hear about another price deduction. I refused to lower my standards/criteria and did not want to pay the gap between the appraiser value and the contract price. After a week of negotiating, sleepless nights and lots of stress, we started making progress. I will never forget that weekend where every time I received a phone call or a text message my heart would skip a beat. This is how much this meant to me. In our last phone call with the agent, before the sellers made their final decision, I emphasized on my story and took advantage of that rapport which I had with the agent and the sellers. I shared my plan for the property again, I ensured them the home will be in great hands and what this would mean to me. This was not the time to be aggressive, instead it was a time to be genuine, honest and try finding common ground. Sunday night, right around 8PM my phone rang. It was the listing agent. The sellers had agreed to reduce the price to $336,000, the listing agent had given up $5,000 from his commission to make this happen and in return he asked me to reduce my commission by $5,000 as well. This was a no brainer since I was getting a property which was worth $350,000-$360,000 for only $336,000. I had to put more money out of pocket but then I looked up what all other buyers for MF have been putting down in the last 90 days and the average was 25% + Closing Cost. All in, down payment, closing cost, 1 point and I was in for 5%.

After the closing, I immediately started renovation. I only hired contractors for the flooring and re-glazing of one of the bathroom and the rest I did myself with the help of few of my friends and my sister. I managed to save at least $15,000 by not going with a contractor but this was not an easy process. It was hard, messy, time consuming and exhausting. With that being said, this is something I will remember for a lifetime and I wouldn’t change anything if I had to do it again. It was definitely worth it!

Today I’m expecting my first Airbnb guest! I will officially start receiving money from this property and my next mortgage payments, and hopefully all following ones, will be covered by that income! I’m super excited and satisfied with the final result! With that being said, here is my favorite part – The Numbers!

Purchase Price: $336,000
Down Payment: 3.5% - $11,760
Closing Cost: $9,493.19
My Commission: $3,400
Money Out of Pocket for the purchase: $17,853.19
Renovation Cost: $9850
Furnishing of Airbnb Unit: $2,560
TOTAL OUT OF POCKET: $30,263.19
ARV: $385,000.00

Estimate Annual Income from Rental Unit: $30,000
Mortgage Payments + Expenses for both units and Reserves: $27,560
Estimated Annual Profit: $2,440
Househack Positive Cashflow: $203.33
Saving of not Renting or Paying mortgage: $23,760
Balance paid down toward Principle and Interest in first year: $23,760
Added value to the property by Sweat Equity: $49,000

Overall numbers are looking great now and I’m excited to benefit from the results in the near future.
What do you think?
Was it worth it?
What would you do differently?
What’s your story?

I look forward to seeing your comments! I will be making a detailed video showing and describing the entire process. Stay tuned!