House Hack/Live-in Flip in Raleigh, North Carolina

[Benjamin Carver]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $367,000
Cash invested: $18,000

Single family house hack live-in flip in North Raleigh.

1984 3/2 split level. Full cosmetic rehab. Turned into up-down duplex. Airbnb the top half and turn the bottom into a 1 bedroom apartment with walkout entrance and full kitchen.

Full cash out: $40k
Monthly Expenses: $2800
Estimated bnb revenue while house hacking: $2000-2500
Cashflow after moving out: 750-1000

Cosmetic Flip Expected Equity Gained Minus Rehab Cost: $20k

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

Save hundreds on rent monthly. Get tax benefits and future cashflow. All while paying down a mortgage on a home in a prime area of Raleigh.

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

Good old MLS. Crappy phone pictures and original owners had stuff everywhere. We saw the potential and were their only offer. Between price reduction and concessions we got it down from $375k to about $362k.

How did you finance this deal?

6.75% rate on FHA. The monthly payment was identical to 5% down due to rate differences. Worked with a local lender who helps other house hackers.

How did you add value to the deal?

Full cosmetic rehab to bring it from 1984 original condition to modern. Adding 150 or so sq ft of finished space by turning a utility room into a kitchen. Increasing rent potential by being able to rent both units separately.

What was the outcome?

50% left to go on renovation and then we get it listed on airbnb. Stay tuned.

Lessons learned? Challenges?

The roof looked good but was covered a lot with pine needles. Roof was reported 3-5 years old but no paperwork. Should have got an inspection done and dug deeper but our general inspector didn't find any issues. Turned out after the sale the roof was near the end of its life. Negotiating compensation for the false advertisement currently. Headache that could have been avoided.

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

I'm a real estate agent here in Raleigh North Carolina