house hack, live in with garage conversion

[Sam Conway]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $230,000
Cash invested: $60,000

purchased this home to live in, garage was already converted with bedroom, full bathroom and living space. I remodeled the inside, added a full kitchenette, washer drier, heat and a/c. i currently rent this unit out for $1,450 a month and it pays $100 over my mortgage. I still cover insurance and taxes on my own. I have had it rented for over 3 years now.

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

i was looking to buy a house to live in and i saw the ability to rent out the garage space so it was perfect.

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

found it on redfin. the hud report stated it needed electrical repair and had a water leak. so i was able to get the bank down on their price from 250k. i had been watching this house for a while and knew it was priced high and the second they dropped the listing price i went to go look at it as i knew they were motivated. when i walked through the house i noticed the water leak was an easy fix and also there was no electrical issue as the breakers were just shut off.

How did you finance this deal?

with a conventional loan. i borrowed $40k from my dad and maybe monthly payment to him on the money i borrowed. 1 year later i refinanced the house paid my dad off for the down payment i borrowed.

How did you add value to the deal?

painted and put fresh carpet in. remodeled the garage so i was able to rent the garage out for top dollar.

What was the outcome?

i have a house that has almost doubled in value while covering my mortgage by renting out my garage unit.

Lessons learned? Challenges?

i would have remodeled the garage faster if i knew how well it was going to rent out. it took me about 2ish years to finish the garage. if i could do it again i would've remodeled the garage first and paid someone to do it instead of doing most of it myself. also i refinanced the house twice, the second time i pulled money out to start a business which has not made me any money yet. I would have taken my money from the second refi and purchased another house instead of starting a business.