House Hack (Physician Loan)

[MIlton Monzon]

Investment Info:

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

Purchase price: $255,000

On Market duplex. Negotiated from 325k to 275k. Used inspection to bring down to 255k with 3% seller credit for closing cost. Used the Physician Loan. No PMI and 0 closing cost. Appraised 'as is' at 325k without updates. Looks a little beat up on one unit and all mechanicals are old. 60-80k in updates needed and after one year of living here will cash flow around 200$ as a full rental with a 8.4 rate. Will be able to pull almost all my invested money back out with ARV in the high 400s.

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

Moved back home post military service and promised myself I would buy wherever I move to.

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

MLS. Represented myself and negotiated with the seller and agent using the inspection and identified high ticket items (mechanicals, foundation, sewer line, etc)

How did you finance this deal?

Used the Physician Loan which is similar to the VA loan but fixed to either a single family or two family. Negotiated 3% seller credit so at closing received a check of 300$ back. Got paid 300$ to get this duplex in UTAH!

How did you add value to the deal?

"as is" appraised at 325k. 70k above purchase price. Putting in about 60-80k and modernizing it within the next two months. (financing all repairs using 0% rate credit cards and personal loans). Duplex in this area fixed up with these type of repairs are appraising above 400k. So whether rates drop or not in the next 12 months we will be able to pull out via refi or heloc all out money invested and have a modern duplex.

What was the outcome?

House Hack for year one with half our mortgage paid. After a year with our money pulled back out it will cashflow about 200$ a month or break even dependent on rates.

Lessons learned? Challenges?

Old home but majority of my portfolio is old homes that most people would shy away from. Luckily ive stretched to these genre of RE and 1800 homes dont scare me and have been key to our RE growth.

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

Used Huntington Bank. Amazing bank especially Bill. Specifically for Physicians looking to buy a primary and house hack into a duplex. This team was great.