House Hack #3 (Long Overdue)

[Tucker Mortier]

Investment Info:

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

Purchase price: $247,900
Cash invested: $19,000

Closed on my 3rd house hack in January 2024 and wow this one has been quite the property.  

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

Great location right under Como Lake, a minorly distressed asset I was able to put sweat equity into to bump up the rents. 

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

Found this deal through the MLS- it was listed at $249,000. The property was sitting on the market for about 30 days due to the condition, seasonality (it was December), and smaller size of the property (about 1300 sqft). Settled at $247,900, 3% closing cost credits, and the seller also put in about $3,000 for repairs. Definitely a win

How did you finance this deal?

5% down conventional financing. I was initially going to put down 10%-15% but the new lending requirements only required 5% down- allowing me to keep additional capital for reserves.

How did you add value to the deal?

Increasing rents substantially by rehabbing.  I chose to do a very basic rehab to the lower unit to try to get a tenant in as quickly as possible and turned out to bite me in the end.  Without fully rehabbing a unit it is less likely to draw qualified tenants.  

What was the outcome?

Choosing to rent to an unqualified tenant due to early move-in has resulted in nonpayment of rent and going through the eviction process which I will make a future post about.  It has been a great learning experience!

Lessons learned? Challenges?

There are other challenges that come with unqualified tenants in addition to nonpayment of rent including unauthorized guests staying in the property, broken windows, and other issues which I'll dive deeper into in a future post!  The biggest lesson learned is to stick to your crystal clear criteria, don't rush it, ensure the tenant is qualified, and your chances of success are large!

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

Lender- Tim Swierczek. Agent- Matt Bartholomew. Both Rockstars.

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