1st House Hack in HCOL Area

[Blake Piedrahita]

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $322,000
Cash invested: $5,000

Combining the strategies of 'house hacking' and 'live in flip' I am living in the main part of this home (3BR, 1BA) and renting out the apartment unit (1BR, 1BA) to cover the 'ITI' expenses on my home. I have made significant improvements to the apartment unit and the landscaping, while making cosmetic improvements all over to increase the home value.

After living here for 2 years I will be moving into another house hack while renting this property out, so I can sell in year 5 for 0 CG tax!

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

I wanted to invest in my current market and get practice at the local level before eventually making the shift to investing out of state. This deal provided me the ability to gain a TON of knowledge, cut my living expenses, and build equity through forced appreciation that will allow me to increase my financial position to prepare for more deals.

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

I found this deal by searching with the help of my agent, who was immensely helpful during this process, as he has a much better knowledge of the Denver market than I do. After the first bidder on the property went under contract and then fell through, we sensed the sellers urgency to close and were able to get our offer accepted after receiving appropriate concessions from the seller to make this a great deal.

How did you finance this deal?

I used a 3% conventional loan and leveraged the Colorado Housing and Finance Authority first time homebuyer program to provide an interest free loan to cover down payment and most closing costs. This allowed me to get into this property for very little money out of pocket so that I had ample funds for renovations.