I used the equity I had built up from my townhouse I bought in 2013 to fund this deal by selling it and making a contingent offer. The deal went through and now we live in one side of this duplex while we rent out the other unit. The cash flow if very modest, but it will improve when we move out and rent out the other side (hopefully in 2022), however, cash flow is not my top priority with this property as it should appreciate very well in the long term with its proximity to Lake Minnetonka.

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

I always wanted to try a house hack. I also wanted to sell my townhouse and move out of Minneapolis.

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

Zillow/on the MLS. It was listed for $825k. We offered $775k and eventually met in the middle at $800k.

How did you finance this deal?

Technically these are two twinhomes, not a duplex, so I put 25% down on the side that we rent out and only 5% down on the side we live in since we got a primary residence mortgage on that side. I had no cash at the time of the purchase, but we made an offer contingent on the sale of our townhouse, which sold and had more than enough equity for the down payments.

How did you add value to the deal?

At this point, we haven't yet. My attempt to raise rent when we had a vacancy failed since the unit was available February 1st. I ended up cutting rent a small amount to avoid vacancy. The property was in great shape when we bought it.

What was the outcome?

We have a beautiful duplex that should appreciate in value and rent that we plan on holding for decades.

Lessons learned? Challenges?

The unit we now live in had a tenant in it on a month to month lease when we bought. We needed to move into that unit so the seller informed the tenant he had to move out, which upset him, and he caused some damage to the unit on his way out. When we informed him that he wouldn't be getting all of his security deposit back, he threatened us with a lawsuit, which spooked us into being pretty lenient with him in the end. We should have handled that situation better and stuck to our guns.

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

Yes. DM me if you'd like to get in touch with our team of agents or lender.