Bought a "duplex" in South Austin

[Luis Saenz]

Investment Info:

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

Purchase price: $410,000
Cash invested: $35,000

So this property is legally not a duplex, however the previous owner was operating it as one. After doing my due diligence, I realized the garage unit conversion had been done legally and pulled permits for everything, so my wife and I decided to pull the trigger. We now have a cash flowing duplex in Austin TX, with a net cashflow is about $700/month

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

My wife and I were looking for a house hack to do on our first property

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

This deal kind of just fell in our lap after praying for the opportunity for months! It was a friend of a friend's cousin who was moving to Colorado and had this property that needed a little TLC. We bought it before she listed it!

How did you finance this deal?

We leveraged my wife's parents to help us get financing. I did not think it was possible, but there are four of us on the loan! My wife and I used some saved up money for the downpayment and my commission check for the rehab.

How did you add value to the deal?

Luckily there was not anything severely wrong with property. We put in all new floors, new paint, painted cabinets, fixed some more cosmetic things. We Did have to spend a big chunk of change to separate the units AC system (we used the money that we had saved from house hacking to do this). We added two mini-splits to the garage conversion so we could rent out both sides to separate tenants

What was the outcome?

We ended up with a cash-flowing duplex! and we paid $410k plus rehab cost which was about $35k put us around the house ended up appraising for $570k! Which was insane when we found that out. Prices have come down since we got the appraisal, but we still have a decent amount of equity in it.

Lessons learned? Challenges?

So many lessons learned on this one. Biggest lesson is that don't be afraid when the numbers make sense, even though the property is not legally a duplex, we are operating it as one right now and it bringing in great cashflow for us AND it is in Austin TX! Which mean I cannot wait to see what happens in 5-10 years with the appreciation.

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

My Lender was amazing and made the deal possible for us. His name is James Copeland. Please reach out if you want his contact info.
My broker and team were an amazing support throughout this transaction. When I was getting fearful and wanting to not submit the offer, they encouraged me to do it. My broker at the time was Austin Options Realty. Fantastic brokerage!