1914 cottage with separate guest house

[Vicki Fazzini]

Investment Info:

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

Purchase price: $248,000
Cash invested: $11,000

Purchased 1914 home - 2br/1ba - renovated, that had a guest house in the back yard

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

Our Rule is to acquire property that has two units on it, or the opportunity to build a second unit.

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

We have a friend who is a realtor and she also flips properties. She had just renovated and we made an offer before it hit the market.

How did you finance this deal?

FHA loan - 5% down as owner occupied

How did you add value to the deal?

After we purchased the property, we adding fencing to create two distinctly separate homes. We renovated the guest house to make it a full-time apartment instead of just a little overnight space. The total cost for fencing, landscaping, renovating the guest house was $10k

What was the outcome?

We were able to rent the guest house for $975 per month while we lived in the main cottage. It subsidized 2/3 of our mortgage.

Lessons learned? Challenges?

Challenges - the only challenge to having a renter live 10' from you is that they ask for assistance more frequently because you are so accessible. However, you rarely get difficult tenants, because problematic tenants do not want to live close to their landlords.

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

I am a former real estate agent and I manage 20+ properties for the owner of a real estate company.