Second House Hack Deal! How I cash flow over $1100/M with only a 22K Investment

[Alan Asriants]

Investment Info:

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

Purchase price: $380,000
Cash invested: $22,000

This was my second House Hack. After renting out and refinancing my first home (Triplex) out of FHA, I quickly jumped onto another deal using FHA by increasing my standard of living and Purchasing a Duplex. I took advantage of extremely low rates (2.75%) at the time, and as an agent encouraged friends and others to jump onto this as well. With these rates, you were able to absorb higher purchase prices and FHA mortgage insurance.

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

I wanted to take advantage of low interest rates and using FHA to qualify for a low down payment option

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

Found the deal on the MLS. This Duplex was overpriced and at the time getting into a Duplex with FHA was very difficult on highly desired properties. I purposefully looked for overpriced deals that didn't need much CapEx. With the extremely lower rates, I could absorb the overpriced property and with FHA I was protected by the appraisal.

How did you finance this deal?

Using FHA

How did you add value to the deal?

Did minor work but mostly increased rents to market value

What was the outcome?

With increasing the rents I am currently cash flowing 1128/M with a 58% CoC

Lessons learned? Challenges?

I needed to be creative with FHA and go for deals people thought were overpriced. I had to look past purchase price and look at cash flow and interest rate. Another challenge was learning how to raise rents and stay professional with existing tenants.

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

Real Estate agent - Myself
Lender - Dmitry Shamis (AMRES)
Title - Alpert Abstract LLC