House Hacked Before I knew what House Hacking Was

[Justin Brooks]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $174,900
Cash invested: $500
Sale price: $185,000

House Hacked before that was a term.
- I lived on one side of the duplex and managed the other side personally.
- Property managed and oversaw the repair of malfunctioning HVAC units, refrigerators and garage doors.
- Maintained contacts with vendors including landscaping, HVAC, plumbing and general contractors and handymen

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

The goal was to get my feet wet in property management so that I understood what it was like to lease up a space and manage a tenant. I also wanted to have my tenant pay for my mortgage, which is what happened.

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

I did this deal in 2012 when you could find good deals on the internet. I did exactly what my then real estate coach told me to do. I called a local real estate office and asked for a real estate agent that was also an investor and I had that real estate agent help me through underwriting the deal. I paid 5k less than asking, and received pro-rated rents and all security deposits.

How did you finance this deal?

I used a VA loan to finance this deal.

How did you add value to the deal?

I ended up upgrading the light fixtures, the lawn, deck, A/C, upstairs and downstairs doors. This was a upper middle class rental neighborhood that maintained relatively nice exterior homes, so we ensured curb appeal was always maintained.

What was the outcome?

I ended up getting burned out on this deal and sold it prematurely. I sold it at a small increase in price, but over the years, I spent much of the excess gained on repairs and value add in the house.

Lessons learned? Challenges?

I learned to stretch with that project. The most challenging and scary part was when my A/C went out within a few months of me replacing the deck. I ended up spending nearly $10k that year on repairs and upgrades. If I had of been more savy, I would have asked for a credit at closing to help pay for some of the repairs on the deck.