Single Family Househack

[Jhosdyn Barragan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $769,900
Cash invested: $56,000

Contributors:
Veronica Joubert

Purchased a single family home in Alexandria, Va. Property was off-market and purchased with no contingencies for asking price; the sellers generously agreed to 15K in repairs as a nice bonus. The house has an existing, walkout basement with two bedrooms/1 bath, washer/dryer, and living room. We plan on adding a small kitchenette and hope to rent it out in the $1.6K - $1.8K range. Upstairs we have 6 bedroom/2 baths. We plan on completely renovating and living in the space

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

We felt stabilized in managing our first househack and wanted to rent it out for maximum cashflow. We knew with another walkout basement we could continue to live relatively rent free, build equity, and grow the portfolio predictably. The househack model also allowed us to purchase at a lower downpayment with an owner occupied loan.

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

My wife found it searching Compass. We had a great agent that jump on the tour, connected us with the sellers representation at compass, and put in an offer immediately after touring. The sellers were about to start making renovations in order to get top-dollar, but had an extenuating family circumstance that made them want to close quick. Overall, we felt very lucky considering the current REI climate.

How did you finance this deal?

FHA loan 5% down

How did you add value to the deal?

We will be adding a kitchenette to the walk-out basement to increase rental value. We will also be renovating the kitchen completely, creating an open concept layout to the first floor, combining two rooms to create a grand-master suite with large remodeled bathroom, adding new LVP floors, and improving the backyard.

What was the outcome?

We have contacted our previous contractor who did great work. We will update with a more thorough analysis after renovations are completed.

Lessons learned? Challenges?

Due to timing on renovations (including an on-going project at our first property), we may have to pay two mortgages for a month or two this summer. It is less than ideal, but we know over the long term that will be worth getting such a great deal.

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

Yes, Compass and specifically, Olivia Farrell was a great agent.