House Hack Turned Out of State Investment

[Ricardo Dunmoodie]

Investment Info:

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

Purchase price: $447,000
Cash invested: $75,000
Sale price: $599,000

House Hack Triplex was 0.5 miles from beach in Myrtle Beach, SC. Me, my wife, and our dog are lived in one unit and rented out the other two. After all operating expenses (including paying investor interest payments monthly), we were making $40 monthly and self-managing. After 2 years, we moved to Atlanta, Ga and hired a property manager at a 5% monthly fee; after all operating expenses, our cash flow was $900.

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

We wanted to house hack to decrease our cost of living.

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

We found this deal on Zillow. Negotiating was sparse because it was a hot sellers market (2021) but we used an escalation clause that came in handy. Knowing our numbers made us confident in our top number.

How did you finance this deal?

A family member acted as a private investor to help with the down payment of 20%, and we financed the rest on a 30yr loan at 3.5% rate.

How did you add value to the deal?

renovated all units (one by one), adding $500 in rental income per unit (eventually $1500 additional monthly from all 3 units together)

What was the outcome?

sold the property at a profit in order to reposition into a larger apartment building.

Lessons learned? Challenges?

Many lol. But to name a few:
- Don't spend time or money getting rid of popcorn ceiling. Paint it and move on. Not worth the time or money.
- Don't pay contractors too much up front...
- DIY is good for learning, but hiring professionals gives your freedom to continue to grow. There's a time and place for both
- when renovating, "will this yield higher rent" is a key question that can keep you from spending unnecessary money to make something "nicer in your eyes" for no financial benefit.

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

Craig Memory of Strand Realty Associates in Myrtle Beach, SC is a fantastic agent!