This is my brother's first house hack. I assisted in the finding and buying of the property with the goal of helping our mother live rent free with some cash-flow for living expenses. Basically, this has been our first step in retiring our mother who has been working in the hotel industry and now age 60. Having done some upgrades the upcoming refinance (April, 2020) will finally allow her to not have to work. It will provide for the next house hack and cash for an additional investment property.

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

Having learned about the freedom owning multi-family properties can provide and previous investing mistakes, I knew that one of the most effective and time efficient ways to retire our mom would be a multi-family house. Multiple rents also help offset vacancy risk.

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

I became very familiar over a one and a half year span of what our local market was bearing and its direction in prices. After looking at many houses with mediocre results and missing out on potential purchases because of our delay in making an offer, we decided on this house because of the potential and time on market. The house was priced at market value with purchases that had fallen through. We offered a reduced price via closing costs credits, and additional favorable stipulations.

How did you finance this deal?

FHA - House hack strategy.

How did you add value to the deal?

The original tenants were not the best to have and were on a month to month agreement. We cleared one tenant at a time while repairs and improvements were made to each of the two rental units. After repairs to the second floor we parted ways with the first floor tenant who was not paying timely and would be a negative factor to potential new tenants on the second floor. After all repairs were completed we rented the units very close to market rates.

What was the outcome?

Improved cash-flow, rent free living, and increased value will be used to finance the upcoming two planned multi-family investments.

Lessons learned? Challenges?

Be ready to make a decision on making an offer. We missed out on very good potentials (at better prices) because we did not make an offer looking for the "Perfect" house. By the time we purchased this property we had missed on market value increases on other home by around $50,000!!! Not only did we lose money (gains), time, and future opportunities during this time!!! We would have been much further ahead at this time.

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

Michael Saccoccio of the Saccoccio Group at Coldwell Banker in Warwick, RI was our agent. Prior to becoming an agent myself I reached out to agents. Only Mike returned my call. He is very knowledgeable, friendly, and brings decades of experience. I felt that his character and my past deal experience with him were the reasons why he would become my mentor/sponsor for my licensing.