House hack / historic renovation

[Tim Grandy]

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $142,000
Cash invested: $165,000

Completely renovated this historic bungalow. House hacked for 4 years, by renting out the garage apartment while I lived in the main house. I did the entire main house renovation myself while also living in the house.

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

I have always wanted to renovate an old historic house. I knew the neighborhood was on the rise when I bought it so I knew the upside equity potential was only going up.

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

MLS. I had to offer over asking ($118K asking, paid $142K) and I had to put in $5000 earnest money. I also put the offer as cash (even though I was using a conventional loan) with no contingencies and as-is, no inspection. It was a major risk, but I knew it needed to be totally gutted anyways, and there were multiple offers in a rapidly growing market. I saw the potential in the property!

How did you finance this deal?

Conventional loan 20% down

How did you add value to the deal?

Cash offer, no inspection, no contingencies, no inspection, as - is.

What was the outcome?

Accepted the offer. House is now renovated and worth about $475,000!

Lessons learned? Challenges?

I could write a book on the lessons learned and challenges of this house! It would've made a great HGTV show. Lesson #1, totally gutting a home and rebuilding a 100 year old home is far more work than you can ever imagine, and TV does not even come close to reality when they show a house renovated in 60 minutes. It becomes your life, every spare moment, weekend and holiday is spent on the house. This was not only a physical challenge, but even more so it was a mental challenge to complete.

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

I worked with Carter Clarke IV and his knowledge of the area and connections made the deal possible.