Vancouver Townhome - My First Purchase with VA Home Loan

[Evan Gross]

Investment Info:

Single-family residence 3 bed 2 bath - house hacking rolled to full time rental

Purchase price: $259,000
Cash invested: $0

Townhome, house hacking, one room and garage used by me.

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

First property purchase. Break even, possible cash flow with 0 down VA home loan. No PMI. Made immediate financial sense.

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

Had a real estate agent, but I found it myself on Zillow.

How did you finance this deal?

VA Home Loan

How did you add value to the deal?

Added cabinets and work bench to garage, added water filtration system. Home is newer (2006) so the rest has been minor upgrades - kitchen sink faucet, better toilets, LED lights throughout, under cabinet lighting in kitchen.

What was the outcome?

Home has gained 20% equity, I maintain one room there when back in town so it doesn't yet cash flow. $355 a month out of my pocket, plus income from room rent, covers everything PITI and HOA. With a conservative rental rate for the townhome and 5% vacancy rate, the townhome would cash flow $2280 a year. Assuming break even after maintenance, this still has made sense for me based on the $0 initial investment.

My plan is to continue forward with the roomate model. The millenial generation appears to be more comfortable with this, and the house appears to stay cleaner (roomates keeping eachother honest). If I have a problem roomate, I'll hear about it from the others. Lastly, I won't lose my whole income stream as it will be a rare occasion when all three roomates move out at once. 

Lessons learned? Challenges?

Automating rent through cozy has made the process extremely easy. Location helps attract the best tenants, so evaluating and buying in a good area is very important to me.

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

Agent. My agent was good, but I'm looking for great.