My First House Hack

[David Suarez]

Investment Info:

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

Purchase price: $950,000
Cash invested: $150,000

Single-family residence with potential to add two separate ADU apartments. We currently live in the house 8 months a year and STR the apartments.

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

House hack potential of adding two separate rental income sources while living in the main house.

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

Normal MLS listing. House sat for 4 months where 1 deal fell through. It had two price decreases totaling 5%. Because I was willing to walk away from the deal and had no emotional attachment to the house, I went back and forth on the price settling at 10% below their lowered price which was a total of 15% below the original asking price of $1,099,000.

How did you finance this deal?

Normal fannie mae financing.

How did you add value to the deal?

Built out an apartment in an existing, unimproved space over the garage. Re-did the pool area to make it attractive for summer rental for families visiting Disneyland.

What was the outcome?

85% STR occupancy during the months listed.

Lessons learned? Challenges?

Add 20% or 25% to the contractor estimate.

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

Not really. The lender worked well but I had to shop him to drop the rates.