House-hacking to live rent free | $128k - $170k ARV!

[Brandon Boyd]

Investment Info:

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

Purchase price: $128,500
Cash invested: $22,000

House-hacking to live rent free in Indianapolis, IN! Will eventually become a BRRRR in the near future! Purchased at $128.5k, and is now worth $170k, and potentially more once we add a half bath to each side.

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

My wife and I were paying $1050 a month for a 1bed|1bath apartment. We were moving back to Indianapolis, and the idea of owning our own property and being paid to live in it was extremely exciting to us.

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

My wife and I found it on the MLS. It was under market value, so we put in an escalation clause, sight-unseen. We closed at $128,500.

How did you finance this deal?

Chris France with Centier Bank. We did a 5% down conventional loan, with 4.75% interest rate. Our original lender fell through, so we had to scramble to save the deal. Fortunately, Chris is a pro and helped us make it to closing.

How did you add value to the deal?

Rehabbed the basement, updated both kitchens and baths, and painted interior.

What was the outcome?

Value went from $128k purchase price to $170k ARV. Our current cashflow is $275 a month. Once we move out, we will be at 1.8% (just under the 2% rule!).

My wife and I now are BEING PAID to live in a 3bed|1bath, 2000+ sq ft house! It has probably been best financial decision we ever made.

Lessons learned? Challenges?

Dont trust the inspection report! Make sure you have professionals come out to check for things like mold, foundation damage, as well as making sure the AC units and water heaters work! Our original budget was $14,000, including closing costs, but replacing 2 ac units and 2 high efficiency water heaters put us over $22k.

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

Lenders: Chris France - Centier Bank | Matt Davis - Caliber Home Loans
Agents: Ryan Boyd - Plat Collective | Me - The Home Team (eXp Realty)