Brick 4plex built in 1985. I purchased it in very good condition but I've made many cosmetic improvements and raised rents significantly. I was actually a tenant in the building and the landlord mentioned he wanted to sell it. I had recently learned about house hacking and decided to go for it. I purchased it using a fha loan with 3.5% down for $209k. Estimated appraised value now is $230k.

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

I had recently lost the house i grew up in. My father passed away and there wasn't a will in place. I tree fell on the house and did serious damage I walked away from that house with nothing and lost many of my personal belongings. I started renting an apartment in a 4plex and became a tenant for the first time in my life and I'll be honest i wasn't the best tenant. I was used to doing whatever i wanted. So when the landlord mentioned wanting to sell it i thought maybe I'll try to buy it.

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

Like i said i was actually already living in the building. We didn't negotiate much I agreed to pay the balance of the mortgage $209k. The owner had also bought it by house hacking it and had recently moved into a house. Problem was he bought it right before the market crash and paid $240k and he never renovated any of the units so his rents were way too low for the area. I saw a lot of untapped potential.

How did you finance this deal?

I used a 3.5% down fha loan. It was around $11k for downpayment and closing costs.

How did you add value to the deal?

I added value by renovating each unit as tenants moved out including my own unit. I raised rents in each unit by $150-$250 a month.

What was the outcome?

The outcome was and still is amazing. The tenants are covering my mortgage and all my other expenses. I'm not cashflowing yet but I'm living for free. I just purchased my second deal a live in flip. So when i rent my unit out it will be cashflow positive $650 a month. Not only that but it has added roughly $30k to my net worth. I believe house hacking is the absolute best way to start investing.

Lessons learned? Challenges?

The only real challenges I've faced are finding a good contractor which i have now and the fha loan is a little bit of a long process but i don't even want to complain about that it is worth it 100 times over.

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

I did not on this deal. I worked directly with the owner. But if you are in the Youngstown area i definitely would recommend my cousin Tibitha Matheney at burgan she is the number one selling agent in the Mahoning valley.