Rookie Investors Getting Started House Hacking

[Evan Ordway]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $785,000
Cash invested: $116,250

Duplex with 5 beds, 3 baths in the historic Gallows Hill neighborhood of Salem. Unit 1 has 3 bedrooms and 2 baths, while Unit 2 has 2 bedrooms and 1 bath. We will be house hacking and living in Unit 2 while renting out Unit 1.

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

House hacking seemed like the best option to get started with real estate investing in a high cost area and overall crazy market.

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

We found this deal on the MLS and beat out 15 offers. We didn't offer the most, but the amount we were bringing for the down payment gave the seller's confidence that we would be able to close.

How did you finance this deal?

We got a 10/1 ARM at 4.25% during the fixed portion.

How did you add value to the deal?

We offered the seller's the ability to stay in the unit they were occupying for 2 months rent free, as they are closing on their new property.

What was the outcome?

We closed on the property 5/31.

Lessons learned? Challenges?

We learned that you should plan far ahead with getting your finances in one location. It takes a long time to move money from many accounts and documenting the transactions is cumbersome and stressful.

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

We worked with a lot of great real estate professionals.
Agent: Ryan Guilmartin (Keller Williams)
Loan Officer: Adam Souza (Salem Five Bank)
Real Estate Attorney: Rachel Hollingsworth (Gilmore & Gilmore)