Portland, Oregon Duplex House Hack

[Chace Fraser]

Investment Info:

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

Purchase price: $410,000
Cash invested: $30,000

House Hack

Single level ranch style duplex in the Portland metro area (Milwaukie) purchased for $410,000. Each side is 2 beds 1 bath, 820 square feet, and each unit has a one-car garage. The garages are actually in the center of the building so we don't share a wall with our tenants. Each unit has its own electricity meter but is on the same water meter (we pay the entire water bill). Our mortgage payment is $2,250 and our tenants on the other side pay $1,400 per month (market rent). We're only responsible for $850 of the mortgage! Relative to market rent, we are saving $550 per month.

We used the conventional home possible program and put 5 percent down. Once we closed on the property we replaced the floors and repainted.

The property is in a nice neighborhood with great access to shopping centers and major roads.

The entire process was documented via blog/vlog! You can check it out at https://mrhousehack.com/our-house-hacking-blog

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

House hacking is an incredible way to reduce housing costs and get into buy and hold real estate investing with a relatively low financial barrier to entry.

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

I'm an agent and we found it on the MLS. We actually put in an offer and were told we lost out to some investors. However, I called the listing agent back a few days later to check in, and she said they're weren't able to come to an agreement on the terms. We re-submitted that day and were able to get it under contract.

A lesson I've learned in negotiating for people who are going to live in a property is to ask the seller to do all the repairs instead of asking for a price reduction.

How did you finance this deal?

Conventional Home possible. 5 percent down payment. 30 year amortization.

How did you add value to the deal?

Replaced the floors in the unit we moved into with LifeProof Luxury Vinyl Plank Flooring. It's more expensive per square foot than carpet, but it looks a lot better and should last MANY years. We also repainted.

Lessons learned? Challenges?

The property was fully tenanted when we put our offer in. Both units were rented at $1,400. One set of tenants had 2 dogs, had average pride of ownership, and were never late on rent. The other set of tenants had one dog, high amounts of pride of ownership, but had a propensity of being late on rent. We kept the tenants who payed rent on time.

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

I was the agent, and we worked with Jamie Helton of ENG Lending.