Jacksonville, FL FHA House hacking

[Mike Alt]

Investment Info:

I bought a 4-plex in Riverside neighborhood of Jacksonville, FL.  My wife and I are house hacking this property, renting 3 units, living in one.  We split time between Los Angeles and Jacksonville now.  Lower taxes and we both work remotely

Purchase price: $465,000
Cash invested: $20,000

We purchased this 4-plex in an up and coming neighborhood in downtown Jacksonville, FL. We purchased this property with an FHA loan w/ 3.5% down. Units are all 1/1, about 700sqft each and was fully rented for average of $750 each.

There is an opportunity to raise the rents another $100 or $150 each.

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

We were looking for a way to leverage our FHA loan to buy a 4 unit rental property. We were living full time in Los Angeles and paying a lot in rent and taxes. Florida income tax of 0 and having the benefit of working remotely allows us to split time between LA and Jacksonville and AirBNB the unit while were away.

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

Picked a neighborhood. Looked for 4plexes that were inside FHA guidelines for loan amount and made some offers. If it weren't for the low downpayment and tax advantages, I wouldn't have bought this deal. Numbers are basically break even and not accounting for capex.

How did you finance this deal?

I took out an FHA loan which only required a 3% down. FHA requires owner occupancy so I kept one unit vacant for about 6 months. I did have to pay mortgage insurance but I still had positive cash flow.

How did you add value to the deal?

Haven't done anything yet to add value.  This was a good move because of tax status and the area being in high demand.  This year I'll add coin op washer/dryer and rentable storage lockers in back.  In the process of evicting a non-paying tenant so we haven't even been able to move in yet!

Michael Alt