First duplex and house hack

[Nicole Wood]

Investment Info:

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

Purchase price: $68,000
Cash invested: $7,000

This home is technically a house hack. We live in one side of the duplex. The upper unit is one bedroom. The lower unit which we live in (with 5 kids) is a 2 bedroom (luckily a large two bedroom!). We are also renovating the home as we go. This did save us about $700 a month by moving. Technically with us living here we still pay $130 a month toward mortgage to live here however at our old home we paid $847 to live there per month.

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

Our numbers show that we can be retired if we own 15 units. In my area duplexes are common. Single family through fourplexes are allowed through the FHA. In new york state single families DO NOT cash flow typically.

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

This deal was on the MLS for 2 years prior to use purchasing it. It was negotiated from 79,000 after the appraisal was completed and repairs were found to be needed.

How did you finance this deal?

FHA loan

How did you add value to the deal?

We are remodeling currently. This week we are remodeling the kitchen. We purchased an entire cabinet set for $1900 from a building auction. Total we have around $4000 into remodeling the kitchen with brand new appliances, flooring, cabinets, trim, etc. We remodeled one bathroom so far as well. We painted the upstairs unit and shampooed the carpet. We will be adding a laundry room that can be accessed by both units after replacing the rest of the flooring.

What was the outcome?

Still renting.

Lessons learned? Challenges?

Having financing to complete the remodel is a must.

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

We were not happy with our mortgage company or realtor during this transaction.