Bought our first property! We will move in in February and house hack for 1 year. While we live there, we will save up for our next property to do it over again!

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

I've wanted to get a start in real estate for a while, and learned about house hacking on bigger pockets. It is a great way to get a rental property with very little down, reduce your housing expenses, and get a feel for landlording.

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

I had a goal to buy my first 2-4 unit property within 1 year of moving to Arkansas. After 9 months of looking at the MLS and finding that there weren't many good deals, and the good ones were gone in 24 hours to professional investors, I realized that if I didn't do something differently then I wouldn't reach my goal. In November I sent out 60 letters from a mailing list I got online, and received 5 phone calls. I decided to purchase this duplex based on the low capital needed and ROI.

How did you finance this deal?

For a very long time I planned to use an FHA loan, but I ended up using the Fannie Mae -Freddie Mac Home Possible Loan. It only requires 5% down, but the mortgage insurance is cheaper every month, and unlike the FHA loans nowadays the PMI is cancellable at 80% ltv. The other benefit is that you can have this loan and then get an FHA, but not the other way around. I want to buy another property to house hack next year, so I used the loan with a strategy mind.

How did you add value to the deal?

I bought this property with some equity in it, and we have already agreed on a rent increase with one side of the duplex that was already rented out. My my wife and I will make small touch ups while we live in the property so that it is more attractive to potential renters.

What was the outcome?

We will go from paying monthly rent of 850 to living for free and having the tenant build us equity! With no housing costs and no car payments or consumer debt, we will be able to save our money and buy another multifamily next year, if things go as planned (fingers crossed!).

Lessons learned? Challenges?

Books can teach you a lot, but you really start learning when you get your work. The two largest challenges were an error on my credit report that delayed the loan application by a week and was a huge pain to fix. The other snag was when the appraiser told the seller an approximate valuation. The seller asked me for a $18,000 price increase 48 hours before closing! We were able to come to an agreement that worked for both of us, but in the moment I was worried the deal would fall through.

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

I worked with Broyles Mortgage Brokers, and they were able to get me a competitive interest rate, and worked extremely hard to get through problems that arose in order to close when we wanted to.