House Hacking Success

[Josh Engelhart]

In October 2017 I closed on my second property a 6 Bed 4 Bath 2100 sq ft duplex in Columbus, OH. I had been searching through MLS listings every day and just could not find a deal that I felt worked. I stumbled upon this completed renovated duplex in an up and coming part of town listed on craigslist for $165,000 for sale by owner. I got in touch with the owner and the property looked just as good as the pictures. Cheap finishes, but it was all brand new. Vinyl plank floors, laminate counter tops, new furnaces, water heaters, central air units, 2 brand new full bathrooms, gigantic kitchens with large islands, and 3 tiny little bedrooms per side. After walking through the house with the owner we agreed upon a $150,000 purchase price with a $3,500 closing cost credit.

I did a Freddie Mac home possible loan allowing me to put down 5% or only $7,500. Combine that with $3,500 in seller paid closing costs, a $750 preferred lender discount, $1,500 home buyer grant, $500 credit for completing a home buyer education course, and a $600 cash back mortgage offer. Those credits actually covered all of my closing costs and ate into some of the money required for my down payment. My total out of pocket into the deal was only $6,000.

I got a 3.625% 30 year fixed rate loan. The property taxes are about $1,000 per year. The insurance runs just over $600. The monthly payment including taxes and insurance is only $824 per month. I had the other unit rented out in early November for $925 per month before I had to make my first payment on December 1st. I just got my April rent check 12 days early. I am stoked about how this place is going to cash flow once I move out and can get both units occupied. My deal analyzing spreadsheet just glows green.

The risk. My mom called me crying after driving by the property for the first time telling me how I was making the biggest mistake of my life. It is in a C area and is 5 blocks north or west from places you don't want to be. That being said I feel like I am on the edge of progress and comparable sales are only going up. There is a much smaller 4 bed 2 bath 1700 square foot duplex a few blocks nicer that just went under contract at $210k.

Up next. I'm under contract on a 46k single family house (appraisal and inspection in the next few days.)