House Hack with Short Term Rental

[Nathan Dehn]

Investment Info:

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

Purchase price: $228,000
Cash invested: $10,000

We closed on this duplex 1 week after getting married. it's on a cute commercial strip in the city with coffee shops, antique stores, and restaurants. Perfect for a short term rental. We moved into the lower unit studio. Then, a year later converted the studio to a short term rental and moved upstairs.
We rent the upper unit for $1500/mo and after all expenses our airbnb nets $1000/mo. While our mortgage is only $1250/mo after a refi 2 years later, increasing our equity from 3.5% to over 30%.

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

Wanted to invest in an area we could walk to local coffee shops and restaurants. just so happened to be a killer deal!

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

Found on the MLS and waited a few weeks before writing an offer because we were tired of focusing on new properties that attracted cash buyers. Ended up getting closing costs paid for!

How did you finance this deal?

FHA financing, later refi into a conventional loan 1 year later.

How did you add value to the deal?

added value with elbow grease through painting, functional updates, laying a brick patio, and light fixtures.

What was the outcome?

By far our best investment! Still has high maintenance costs. But, the equity has jumped so high. And, still renting very well. We plan to hold this until we retire.

Lessons learned? Challenges?

The biggest lesson we learned was it's worth to hire professionals! I'm NOT handy. And, we did a lot of work ourselves. But, when we transitioned to professional management and did a short term rental on the lower unit. We realized the time/frustration/quality of work made it sooo worth it to use professionals!

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

Yes, my mother in law since this was before I became an agent. :)