Buy and Hold/House Hacking

[Cameron Rockwell]

Investment Info:

Townhouse buy & hold investment in Virginia Beach.

Purchase price: $155,000
Cash invested: $1,100

House is 3 bedroom 2 and a half bath with 1428 square feet. I live in the master bedroom and I am househacking for 110 percent of my expenses.

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

The Initial investment was low and i knew that i could cover my entire expenses charging per room instead of as a whole. I wanted to figure out how to properly manage tenants. This was my first test as a landlord and made the process easier due to living with the tenants.

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

I used a local realtor and learned that most realtors are not comfortable offering below market value. This was valuable because i now understand the importance of using an investment friendly agent. Once i found one that would work with me we did 30+ LOI's to ensure i got the deal i wanted.

How did you finance this deal?

I used my VA loan as it was an easy way to get a no money down loan. I learned that the VA is very particular on the habitability of the house, which taught me that they would not be the best option for a house that has anything other then cosmetics to repair.

How did you add value to the deal?

The house was on the market for 3 days before i saw the listing. Since I had my contractor come with me when i saw the house I removed the inspection clause. The seller was motivated so this added to him choosing my deal over others.

What was the outcome?

I bought this house only spending 1100 on the home/termite inspection and the appraisal. The house appraised for 165,000 but more importantly i immediately had two tenants lined up who moved in with me upon closing. Combined the two tenants pay 1475. With PITI(Principal, Interest, Taxes, Insurance) MMVC (Maintenance, Management, Vacancy , Capex,) as well as utilities my expenses are at 1350. This allows me to live in the house and get paid 10 percent to do so.

Lessons learned? Challenges?

Buying my first property was a huge learning experience and required a lot of research to verify I knew what I was doing. Bigger pockets has been a huge help with the the steps I used to acquire this property. The biggest benefit i got from bigger pockets were the property analysis tools. I created over 50 reports to evaluate which houses i thought would be a good fit for me. Once I was able to quickly get through analyzing properties that made the process that much easier.