First Investment Property - House Hack in Phoenix

[Matthew DeMichele]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $440,000
Cash invested: $30,000

Currently househacking. The property is a 4 bed/3 bath main house, with a studio/1 bath ADU in the backyard. My current rents completely cover PITI and leave about $400 left over for CapEx, Repairs & Maintenance, and Vacancies. I'm currently paying about $700 out of pocket to cover the rest of the budgeted expenses, which is essentially the equivalent of an equity payment to myself.

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

It's the easiest way to get started! I'm learning how to be an effective landlord and how to get my systems in place, all while turning my rent payments into equity payments.

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

I found this deal through a real estate agent I met on BiggerPockets. His name's Jeremy Holden, and he's the man! He helped me negotiate the purchase price down from $465k to $440k. We used the inspection report and the current state of the market to help us negotiate this.

How did you finance this deal?

Conventional loan with 3% down. The loan officer on this one was Grant Schroeder, who's also on BiggerPockets. Again, highly recommend working with him!

How did you add value to the deal?

I've replaced the roof, fixed sewer issues, and plan on continuing to update the property as I live in it.

What was the outcome?

So far, I've rented out all three extra bedrooms in the main house and the studio unit in the back. By doing this, I've essentially been able to turn the $700/month that I would have been spending on rent into $700/month of equity, all while having my renters cover all other expenses.

Lessons learned? Challenges?

I'm learning that if something is difficult, it's usually because I need a better system for approaching it. For instance, the thought of landlording seemed impossible to me, but I've discovered that having good systems in place makes it way easier.

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

Jeremy Holden (real estate agent) and Grant Schroeder (loan officer)