Our First Owner-Occupied Rental

[Abby Haralson]

Investment Info:

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

Purchase price: $525,000
Cash invested: $26,250

As a split-level home, we're able to rent the top out to 4 college students (Provo, UT has over 60,000 college students within 10 miles) and the bottom out to a couple who takes care of the yard maintenance. My husband and I lived in the basement and renovated it while renting out the top. We've moved away and now I'm the long-distance property manager. The Provo (and Utah market) is expanding rapidly and has an extremely strong rental market.

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

My freshman year of college, I was sitting in an entrepreneurship class when the speaker mentioned that he and his wife had bought 10 homes in the last 10 years and always lived in the basement while renting out the top. I never stopped thinking about that and 3 years later, as a 22-year-old, my husband (26 years old) and I bought our first house-hack!

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

We found this deal through pure luck. I entered my email on a short sale website, the real estate agent who runs it called me, and she happened to be amazing! She worked so hard to make sure we got everything we needed from this deal.

How did you finance this deal?

As first-time homebuyers, we used a conventional loan and put 5% down. We used our savings to cover the DP and CC.

Lessons learned? Challenges?

We've learned so much about being property managers, finding good software (we use Avail), how to analyze deals, and how to leverage debt for our benefit. At one point, I would've been terrified to be half a million dollars in debt. But now that I've realized how to manage a property and the power of using someone else's money to build equity, I can't wait to do it again!

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

If you're in the Utah County area and you're looking for an agent, you should definitely consider Tiffany Davidson at 21st Century. We were outbid on this deal but she still got the buyer to go with us instead! She's a firecracker and she'll work extremely hard for you.