First rental property; house hacked with zero down VA loan

[Marvin Baker]

Investment Info:

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

Purchase price: $165,000
Cash invested: $10,000

First rental with house hacked duplex. VA loan with NO DP, but picked some upgraded finishes and appliances from the builder.

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

I really wanted to see how the VA loan process worked for me. It was beneficial and worked same as a conventional loan. This was an easy way to house hack and decease my housing expense by 75%.

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

I found this house by walking the neighborhood and looking for new builds. I worked out an upgraded package of finishes, appliances, and landscape with the builder. He have me credits for the normal package they use and I added about $10K for stainless steel, ceiling fans, security fence, stained concreate floors. This was risky as it was done and paid outside the purchase contract.

How did you finance this deal?

VA loan

How did you add value to the deal?

I invested in upgrades inside and out so that my unit stood out among the cookie cutters.

What was the outcome?

Since 2011, neither side of the duplex has been empty for more than 2 weeks. No vacancy expense other than make ready repairs. I think this is because I added those little upgrades that make people choose my unit over others when they are looking around and willing to pay the $50-$100 more per month when compared to other similar units.

Lessons learned? Challenges?

I learned to prioritize what other people like in a home, not just what is least expensive to me or what I might personally like or accept.