My first House Hack/BRRRR/ Living in a construction zone

[Cameron O'Connor]

Investment Info:

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

Purchase price: $202,000
Cash invested: $50,000

House Hack/ BRRRR property. Bought this triplex, lived in one unit, fixed up and moved to the next, and repeat. Completed most of the work myself, all that was allowed by code. Now with all units renovated, rents have increased by 33%. Refinanced to pull out improvement cost and capital. I will hold this property for many years... unless the price is right.

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

I am very handy and enjoy doing a lot of work myself. While I understand that is not a "scalable" practice, with this being my first property, it gave me the opportunity to teach myself a lot and get into the real estate market slowly but with a solid foundation.

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

As this is my first true real estate deal, I would venture to say, my negotiating and "best deal" practices were not the best. However, that is no concern to me. I know I will hold this property for many years. With that, I don't care if I could have saved an extra $5k on the purchase price, because I have already made up for that in the capital improvements.

How did you finance this deal?

Conventional Loan, nothing really special hear. I'm an engineer, not an artist. But going forward, I plan to branch out as I learn more creative financing methods.

How did you add value to the deal?

I completely renovated all three units of this triplex and the outside. With future renovations of the units, from the kitchen cabinets, all new flooring, building out a room into an attic, tile shower, new vanity and countertops, and all new paint. However, some of the easiest and most visually impactful improvements are in the small/easy landscaping. I was able to trim bushes, add some low maintenance plants, and the first impression of the house has changed dramatically.

What was the outcome?

Outcome has been a property that I have fully switched to a property manager, making it a truly passive investment, with increased value, all capital pulled out with the BRRRR method, and increase rent (and cashflow).

Lessons learned? Challenges?

Tons of lessons learned in the rehab, the biggest one being, as much as I enjoy and am decent at doing the work, hire more of the work out. I would work my 9-5, which was more like 6am to 7pm, then come home and work on the house for 4 hours. It was draining and not a sustainable life style. So my enjoyment of renovations can be on a small built-in, or a nice piece of woodwork that I truly enjoy; not in my kitchen forcing me to eat microwavable mac n cheese from my lap.

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

I worked with two real estate professionals that I had a great experience with and have continued working with for my next deals.