House hacking + live in flip = happy first time home buyers

[Kevin Krysty Jr.]

Investment Info:

Single-family residence buy & hold investment in Southern Pines.

Purchase price: $200,000
Cash invested: $7,000

My wife and I purchased our first home (live in flip w/ attached studio) at the end of 2018. We purchased this property for $200,000 and with some simple cosmetic updates; new floors, countertops, light fixtures, etc., (~$25,000 renovations), the ARV conservatively comes out to $275,000+. Not only that but we furnished the attached studio and put it on Airbnb and we have been bringing in about $1,500/month in revenue...essentially paying our mortgage and putting a few hundred dollars in our pocket. House hacking + live in flip = happy first time home buyers/investors.

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

We were living in an apartment and we knew we wanted to buy a home, but as Robert Kiyosaki says, "Most people confuse their homes for assets when they're actually liabilities." Knowing this, I wanted to buy something we could add value to but my wife DID NOT want a total fixer upper. The fact that it also had the mother-in-law sweet (studio), we saw an opportunity to rent it out and turn our home into an asset that creates money for us, on top of the equity we could build into it.

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

I found this deal on the MLS. It had been on the market 45 days, and they had just reduced the price by $25,000, we scheduled a showing and made an offer that day.

How did you finance this deal?

FHA loan (my wife is the sole borrower)

How did you add value to the deal?

Through basic renovations. We installed engineered hardwood floors, painted the kitchen cabinets, installed new countertops, backsplash, underneath cabinet lighting, tile in bathrooms, new light fixtures, and furnished the studio.

What was the outcome?

We built/building major equity into this home, and we absolutely love living here!

Lessons learned? Challenges?

We had to replace the front wall because of termite damage (not found during due diligence), but it makes me more knowledgable about termites and the damage they create that I can share with clients and others. Also learning how doing all the work yourself can save money, but leveraging that out to others saves significant time and a lot of stress. There's a fine line...still learning that.

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

Our lender, Rochelle Boone, is fantastic. My good friend, Joseph Druther, helped me tremendously throughout a lot of this process giving me wisdom, insight, encouragement, and guidance.