My First Triplex in West Philly (House Hack)

[Nicholas Wilson]

Investment Info:

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

Triplex: Cash flowing house hack in an up-and-coming neighborhood.

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

I wanted to house hack to keep my expenses low. I also teach in the neighborhood that the triplex is in.

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

Since I was using FHA I did not want to acquire a property AS-IS, so I stalked the MLS until I found one that showed the numbers I was looking for.

How did you finance this deal?

FHA.

How did you add value to the deal?

I got approved through one lender, then shopped around to 4 other lenders to find better terms. In the end, my interest rate was .4% lower and I saved $10,000 in fees and closing costs.

The rents are currently below market value. My plan is to do renovations in the unit my wife and I are living in and then move to the second floor when the lease is up. That way we can raise the rent in our unit and begin work on the next one to raise the value there as well.

[Nicholas Wilson]

@Madhu Kumar I found this property on Redfin.com. I have my criteria in a saved search so only multifamily properties with at least 3 bathrooms comes up. From there I just run the numbers on every property that comes up. 

My PITI is around $1000/month and the rental income for the other two units is $1275. It's not the largest spread but I was okay with it because my objective was clear: live mortgage free in a multi-family property in 19131. The $275 will go towards utilities. That's good enough for me. Plus, as we improve the units the rents can increase. Once we move on to our next property, we'll be getting an additional $700 from the unit we were occupying.