My First Buy & Hold Investment and House Hack

[William Burnson]

Investment Info:

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

Purchase price: $397,000
Cash invested: $11,000

House Hacking a 4 unit property in Winnetka Heights, Dallas. I live in one unit and the other three bring me profit of $440 each month, not including what I used to spend on rent, which was close to $700. According to market rates, the unit I am in should rent out for $1000-1300 once I move to my next property. I will be doing updates to the property as well while I live in it, and update other once tenants that are currently renting move out.

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

I read a lot on biggerpockets.com and listened to the podcast. Once I calculated how much money I had wasted in rent in the past 6 years living in Dallas (hint: well over $30,000) I decided to do something about it. House hacking is the best option for me in my current situation so I found a deal.

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

I found it on MLS. I am also starting out in real estate and I did the numbers and jumped on the property as soon as I saw it. Seller didn't want to pay anything toward closing or title, but also wanted to have to property off his hands. However, I did not have enough cash to pay everything at closing. I gave him a really high number for seller concessions, then in the end we agreed on $2k above asking price for $3k in seller concessions at closing and seller paying the $2500 title policy.

How did you finance this deal?

Straight 97 conventional loan.

How did you add value to the deal?

I am updating the kitchen and bathroom in the unit I will be living in, which are the biggest bangs for your buck as far as appraisals and having good renters and rent prices go.

What was the outcome?

Well, I'm living for free--and when you factor in the cost of rent in Dallas to the amount I'm being paid above mortgage it ends up being $1,050/month in income. I don't hate it.

Lessons learned? Challenges?

Currently in the beginning stages of living there so I still have a lot to learn. But I did have to walk away from a couple deals that I thought would be good after doing due diligence. One thing I can say is to ALWAYS talk to the current tenants at the property.

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

Schuyler Lehman with First Choice Loans in Dallas. He's the freakin man.