House Hack for Married 30+ w/ Baby

[Nicholas Lacefield]

Investment Info:

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

Purchase price: $182,000
Cash invested: $40,000

Nice Duplex near downtown New Albany. My wife and I are currently house hacking this duplex. We live in the spacious bottom unit and rent out the top unit. We wanted to live in a property and have someone else pay the mortgage, however we wanted a nice place to live as well because we had a baby on the way and needed to have additional space. This duplex worked out great for our needs.

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

My wife and I wanted a duplex that was comfortable for us to live in one unit while renting out the other unit. This one has two very nice units but the bottom is about 1200 sq. ft. with two beds and two baths.

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

Found it on the MLS through our Real Estate agent. We negotiated down from 189K to 182K.

How did you finance this deal?

I sold my half of a rental unit in Louisville Ky and did a 1031 exchange to buy this property. This increased my cashflow by about 150 dollars a month from the previous investment.

How did you add value to the deal?

We were able to make this investment work since we decided to live in this unit. Otherwise we probable would not have bought it and the potential to add value was low. Similarly though we were able to negotiate a better price because we knew most investors would not pay what the property was actually worth unless they were planning to live in the duplex as well.

What was the outcome?

This unit came with a great tenant that has been renting from us for about a year now. This has been a great property in many ways but has also has been a bit of a money pit as well. Since moving in last November we have had to replace the sewer line ($7000), and water heater ($1000). This essentially whipped out our income on the property. However we do love the house and hopeful for a more successful year next year.

Lessons learned? Challenges?

We know that any property can have unexpected maintenance issues. Always have some money tucked away for the unexpected.

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

Yes we worked with Lydia Parker from Keller Williams. Would highly recommend her for a buyers agent.