First Step into Real Estate via House-Hack. And It Worked!

[Aaron Duthie]

Investment Info:

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

Purchase price: $390,000
Cash invested: $70,000
Sale price: $600,000

Purchased a Full-Duplex in DFW area at the start of the pandemic, Buy and Hold house hack with value-add renovations across 3.5 year period.

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

As part of my journey to FI, the initial goal for this property was to cut down on my biggest living expense: Housing. I used house hacking as the primary strategy and slowly forced appreciation over the hold period while living in each unit.

Shout out to Scott Trench and his book Set for Life for laying the educational groundwork, and to the BiggerPockets community for all the help along the way.

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

Purchased on MLS through local buyer agent during a time when everyone else was sitting on the sidelines due to massive uncertainty (beginning of the pandemic).

How did you finance this deal?

Financed through FHA Loan 3.5% downpayment

How did you add value to the deal?

Awesome hands-on learning experience:
- House-hacked each side across 2 years, then moved out and fully rented out in Year 3+.
- Started small on the renovations and progressively worked on more skill-intensive projects, while also subcontracting out various jobs.
- Managed all Leasing
- For the Sale, I listed on the MLS through flat-fee broker and represented myself as Owner/Seller

What was the outcome?

Results:
- All capital gains tax free through 121 exclusion
- 3X Equity multiple
- 70%+ IRR

Lessons learned? Challenges?

Everything is a challenge. Nothing ever goes as smoothly as it's supposed to:
- Look forward to the frustrating situations, because those will be your greatest drivers of growth
- Conserve your energy with gratitude instead of burning it up in anger
- Stay committed for the long-term

The positive big impact results will follow!