60's ranch with multiple income streams from detached garage with "Loft" living space

[Mark Faulkner]

Investment Info:

Single-family residence buy & hold investment in Marietta.

Purchase price: $145,000
Cash invested: $5,000

After recently moving to Atlanta in 2016, I immediately wanted to buy another home. From the moment I saw this home, I knew it was going to be a house hack situation. The house had a massive detached garage with a "office" space above it around 650 sqft. It had a bathroom, but nothing else. I ended up building a full kitchen into a "loft" style open space. I put a laundry unit in the garage and it has been the gem of my portfolio ever since. I lived in the home for 4 years with a room mate and rented out the "loft". I fully covered my mortgage and some while living there. I wish I could have bought 10 more of these!

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

House Hack and loft office conversion to living space for multiple incomes on one property

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

This was a FSBO deal that I found by looking in a specific area.

How did you finance this deal?

Owner financing with a 3.5% interest rate. Hardly anything down which was acceptable given market conditions in June 2017.

How did you add value to the deal?

Sweat equity and building a kitchen into the "office" space above the garage. I was able to easily build in a kitchen which made cashflow very well.

What was the outcome?

Best home in my portfolio from a cashflow standpoint. I still have it.

Lessons learned? Challenges?

I learned early on that I did not want to subdivide the property and go through the pains of dealing with county code people which is required to have an official separate living space. The neighborhood has a few of these in existence which sort of grandfathers me into hopefully not having anyone complain about it. NIMBYS are not prevalent in this area as it is a middle-income older community with many log standing residents. I would not try this in an HOA or upper-scale areas where NIMBY's live