Accidental house hack - pulled HELOC - a REI was born.

[Jordan Messick]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $196,000
Cash invested: $7,000

Prior to being introduced to the forum, I unknowingly house hacked my first/current property. I used an FHA to only put 3.5% down. Rented out rooms which has covered the mortgage. Now have $100k+ in equity and have opened a HELOC to use for investment properties. My plan is to find private money for the purchase price of BRRR or Fix and Flips and then use my line for the upfits. I also may transition my house hack into a BRRR if I choose to move into the next house and rent this one instead.

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

This was really out of necessity. I wanted to build equity in a house rather then throwing money away in rent. I didnt want to pay all of the mortgage so I rented out the two spare rooms which ended up covering nearly the entire mortgage.

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

I found this house through zillow believe it or not. It was out of my price range when it was initially posted. I continuously checked back and the same day that I saw a substantial price reduction, I made my offer.

How did you finance this deal?

FHA requiring only 3.5% down with the seller covering closing cost.

How did you add value to the deal?

I have done a lot of remodeling through out the house including updating kitchen, adding wainscoting to dining room, added a 900 sqft deck, updated bathrooms, updated light fixtures throughout.

What was the outcome?

New appraisal was done for my HELOC and came in at $270K.

Lessons learned? Challenges?

Lesson learned is that you can create wealth through real estate and I would like to find and actively pursue investment deals now.