House hack/ live in flip

[John Subick]

Investment Info:

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

Purchase price: $220,000
Cash invested: $30,000

Currently house hacking. Renovated the basement unit, new roof, new soffit/ facia, new gutters, new exterior paint that was paid for by seller. I bought the house with an unfinished ADU that I hope to finish by Fall of 2024. The goal is to move into another property by spring 2025 to do another live in flip and keep this property for a few years at least.

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

I wanted to be able to put in some sweat equity and learn some of the skills needed in this trade. This was my first deal, and house hacking made the most sense because it lowered the threshold for risk in my mind. Making money was a bonus because I live here.

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

It was an off market property that my realtor found while I was out of state. He found it because he doubles as a painter and the seller wanted to get the house ready to put on the market in the spring/ summer. I bought it in as is condition for under market price.

How did you finance this deal?

100% VA loan, which allowed me to put money saved towards renovations.

How did you add value to the deal?

Completely redid the basement. New paint, lvp floors throughout, new bathroom. The only thing kept was the kitchen cabinets and appliances.

What was the outcome?

Outcome currently is a rented basement for $1,350 a month + $130 in utilities while I live in the upstairs unit. The mortgage is $1800/ month, but I am looking to refi and pull cash out to finish the ADU and lower my interest rate by 1-1.5 points.

Lessons learned? Challenges?

Contracting has been the biggest lesson learned. It’s hard to find good help, so I am hoping to screen better next time. I’ve watched a lot of videos on how to screen and how to set up work with contractors, so I’m hopeful to build those relationships more in this area in the future.

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

Christ VanWinkle is a great Minot realtor and painter. He’s skilled, he finds off market deals, and he was patient with me working through my first deal.