Decade long house hack turns into cash cow

[Adam Messmer]

Investment Info:

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

Purchase price: $148,000
Cash invested: $9,000

This was our first home! It was a house hack in the Clintonville area of Columbus, OH. We bought with an FHA loan with 3.5% down plus an OHFA 2nd that gave us 2% of the purchase price as a forgivable 2nd. You just need to live in it for 5 years to have the loan forgiven completely. We put down the 1.5% and several years later needed to replace the HVAC in the tenant unit, but other than that it's been a dream of a wealth builder!

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

My wife and I were two starry-eyed would-be investors who knew a house hack was the way to start!

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

We found it on the MLS and we bought it for list price. At the time, real estate in the central Ohio area was still feeling the pain of the 08 housing crisis, we were able to pick this up right before the market really started to hockey stick.

How did you finance this deal?

FHA and OHFA 2nd with down payment assistance

Lessons learned? Challenges?

We moved in on July 4th of that year, which was the hottest day of the year in 2013. We moved into the duplex a month after closing because we needed to give one of the tenants a 30-day notice. I got my first rent check a few days earlier, which was $650. The day after we moved in, the AC went out. It was the motor. The HVAC repair guy said it would be $200 and 3 weeks to get a new motor, or he had a premium motor he could install right now for exactly $650! And thus, I became a landlord.