House Hack #1 from 2019!

[Ryan Thomson]

Investment Info:

Single-family residence buy & hold investment in Colorado Springs.

Purchase price: $260,000
Cash invested: $10,000

Contributors:
Mark Hirleman

House Hack with bedroom rentals and a garage conversion airbnb. SFH with 4 bedrooms. Lived in one bedroom. Rented the other three. Converted one of the garages into a studio kitchenette apartment by using a 20K personal loan @10% interest for 10 years.

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

I love the ROI of a house hack since you only have to put 5% down.

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

Realtor saw it listed as a 3bed and 2 bath. But it was really a 4bed/2bath. There was also and extra attached single car garage that could be converted.

How did you finance this deal?

I used a conventional loan 5% down. For the garage conversion, I borrowed 20k with a personal loan @ 10% interest for 10 years.

How did you add value to the deal?

I converted the 200 sqft one car garage into a studio apartment with a kitchenette and a bathroom.

What was the outcome?

The garage studio apartment is on airbnb. The airbnb nets me $1450 every month and the bedrooms rented for $1800 total when I lived there. On a $1550 mortgage I am grossing $3250 on rent every month. Now that I have moved out of this house the bedrooms gross $2500 and the Airbnb still nets $1400ish. Putting me at $3900 on a $1550 mortgage.

Lessons learned? Challenges?

Look for value where others don't see it. Be creative. If you have a good idea you can probably find financing.