Cashflowing Cleveland Suburb Duplex / House Hack

[Brian Lewis]

Investment Info:

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

Duplex built in 1964, 3 beds/1 bath up and down (rare find for duplexes in the area).

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

I wanted the cash flow and tax benefits. I lived in the home initially and fixed it up while renting out the other unit.

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

I found this through a realtor who specialized in multifamily properties. The backstory was the person who owned it lived in the home, and did not rent the other unit. He was elderly, passed away and the children put it up for sale. We reached a fair agreement but luck was on my side. I happened to visit the property a second time during a heavy rain, and there was water leaking in the basement. We used that to our advantage and price was reduced.

How did you finance this deal?

FHA, 3% down if I remember correctly. 3.9% interest rate

How did you add value to the deal?

I've kept up with improvements including new driveway, new doors, rebuilt balcony, removed asbestos tiles in basement, laid tile in the kitchen, re-did hardwood floors, repair leaks in basement, new hot water tanks, new/updated electrical panels. Long term tenants in both units.

What was the outcome?

It has been cash flowing since day one. I would highly recommend anyone that wants to get into real estate to house hack. I had no experience and knew no one else in the business. Trial by fire was the best way for me to learn.

Lessons learned? Challenges?

Doing your due diligence is key with renters. While there is always a risk with getting a bad renter, I've learned some things to look out for. If you have a gut feeling something is too good to be true, it probably is. I learned the hard way with the first tenant I ever had, that led to an eviction of non payment after about 9 months into a year lease. Treat tenants good, but never deviate from the lease.

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

The realtor I used was great. Unfortunately she got out of the business shortly after this deal to run a construction company with her husband,