Investment Info:

Single-family residence buy & hold investment in Annandale.

Contributors:
Veronica Joubert

Purchased a single family rambler style home in Fairfax, VA. Live-in flip for the upstairs for about two months. Sweat equity renovations upstairs with the help of our family. The basement was remodeled from having one bedroom, one bath, and a small workshop/laundry room to having three bedrooms, two baths, kitchenette and shared laundry with our three bed two bath upstairs. We found this to be the best way to maximize current and future cash flow in the highly competitive Northern VA market.

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

Getting started in REI. We knew we had to jump in. We wanted to rent out part of the home and do it in a way that could afford us and the tenants maximum privacy. In the future we can have two sets of tenants for maximum cashflow.

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

We found the deal through the MLS. We we're able to pick it up for asking price because the house had plumbing and foundation issues. We decided to take the leap and make the offer after two previous, higher offers had backed out.

How did you finance this deal?

Owner occupied loan. We put down 5%.

How did you add value to the deal?

Sweat equity to our upstairs "unit" through new LVP floors, paint, light/bathroom fixtures. Downstairs we added two bedrooms and a bathroom. We also added a separate walkout exit for the downstairs tenants to minimize crossover and maximize privacy.

What was the outcome?

Tenants have paid 80% of our mortgage allowing us to stack cash for our next owner occupied househack (we just closed and are looking to repeat the process). After we move out we will Cashflow approximately 1.5K/month.

Lessons learned? Challenges?

Purchasing during the height of Covid meant no one at the county would pick up the phone and finding guidance on renovations from was a nightmare. We also had difficulty finding and managing a reliable contractor. Saving money with cheap ones backfired as they were always late, no-showed, or had poor workmanship. Highly recommend going with a pricier contractor if it means you get higher quality service. Also, renting by the room increases profit but is much more work than renting to a family.

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

We found a great agent Joaquin Camarasa networking through BiggerPockets forums. After chatting we met up in real life as he is also from the area and started pursuing our first deal together.