Double the Fun! Duplex BRRRR in Orlando, FL

[Hilary Stalder]

Investment Info:

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

Purchase price: $303,000
Cash invested: $60,000

My boyfriend purchased this house as a buy and hold/house hack. It's a little over 1500 sf duplex, each side about 750sf 2/1 units and it is a major fixer upper! We bought the house at $313k and did 3% back in closing costs to maximize cash in hand. The renovations will cost between $40-50k and are mostly maintenance/cosmetic (roof, add AC, flooring, counter tops, paint, trim, doors, etc.). We have a good list of reliable subs that will help us get this done.

We're hoping to have it up and ready for rent by August time frame at which point we'll also move into it. We're expecting the rent out the other side for $1350/month which will cover all but $600 of our mortgage. This will allow us to save exponentially more than ever before! Once we live in it for a year we will find something else to live in and rent out both sides for a cash flow of $300+/month.

The duplex is sandwiched in between two new builds and is also in an up-and-coming area of Winter Park, close to downtown Orlando and major highways (I-4), but also next to all that WP has to offer. Long term we'd like to build new. Once we own the land outright we should be able to build a luxury duplex such as the one next to us to either sell or rent, depending on which makes the most sense at the time. This is a 15-20 year plan.

Update October 2019: Rented Side 1 in August 2019 for $1400 (+ $50 for shed storage = $1450 total) before we moved in in September 2019. Had a major plumbing issue that set us back $3k but glad we knew about it and had the extra income to offset our little "suprise". Otherwise has been a great investment!

Update June 2020: Side 1 remains rented. We finished all our plans through living here with our saved income. Added a fence for a fully fenced in yard and added driveways to both sides. When we move we expect to list our side for $1500/month. The area can support it.

Update July 2020: Refinanced the property into a conventional loan for $380k, got rid of PMI and a few thousand in our pockets. New monthly payment will be less per month and rents in the area have increased so new cash flow will be around $550-$600 once we move.

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

Cash flow from 2 units under 1 roof

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

MLS

How did you finance this deal?

FHA financing with 5% down since we house hacked and lived in the house for a year

How did you add value to the deal?

Complete interior gut, added AC, new roof, facelift and added a fence

What was the outcome?

Refinanced in July 2020 for $380k

Lessons learned? Challenges?

This was our first re-fi. It's good to know that you must be at 80% LTV BEFORE getting any money out of the deal. The market conditions were ripe for a refi (low interest rate, good market) so we knew we had to take advantage. Luckily we weren't counting on any cash out for this deal, but it's good to know for upcoming properties.

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

No, we did not use an agent, but I am an agent so it helped us out to save that money on the purchase price.