3-Family Buy and Hold

[Coty B Lunn]

Investment Info:

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

Purchase price: $94,000
Cash invested: $5,000

House hacking at its finest! This was my second investment property - a 3 family residence! This one features a single family home - in which I live and two apartments above an oversized, long 2 car garage. The two apartments are one-bedrooms each, but cover the mortgage, taxes and insurance. On top of that, they pay for my utilities each month in full with a small cash flow at the end! What is better than that?

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

I was looking for my second investment, but I wanted to live in this property - house hack if you will.

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

I used a local Realtor to send me properties and then chose the homes I wanted to see. I only had to look at 4 properties to figure out this was the one for me!

How did you finance this deal?

Since I used a conventional 3% down, no closing costs deal for my first deal, I chose to use my FHA loan for this one since I was moving into it!

How did you add value to the deal?

I made some small changes to the property heating system and other small cosmetic upgrades.

What was the outcome?

I was able to live in the property while having my mortgage, taxes, insurance and utilities paid every month!

Lessons learned? Challenges?

The lesson here is that it works. When I told people of my plans, everyone said I was crazy, was going to fail, get bad tenants who destroy everything, etc. It couldn't have been further from the truth! Plus, when I move out of here some day, I can rent out this home and I'll be profiting $2,015 each month even after mortgage, taxes and insurance!