First Investment House Hack

[Ethan Hunt]

Investment Info:

Townhouse other investment in Hammond.

Purchase price: $102,500
Cash invested: $5,970

This property is my first real estate investment in the form of a house hack. My cash invested includes the initial cash outflows as well as rehab costs. It doesn't cash flow as well as I would hope, but I am also getting rent savings on the property that is not calculated. It is a 2 bedroom/2.5 bathroom townhouse in a college town that will cash flow well after a year of me living in it.

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

I was between places of living and I had one more semester of college to complete, so I researched good deals to house hack and asked possible roommates if they wanted to stay with me, and I made it work out.

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

I found this deal on Zillow as a For Sale By Owner, and the owner priced it very high at $118,500. Similar comps were going for $108,000, so I offered $97,500 with $4,500 in closing. She asked for closer to $100,000, and I stated that I would be comfortable paying $102,500 with $4,500 in closing, and she accepted the offer.

How did you finance this deal?

FHA loan

How did you add value to the deal?

The house was very dated and had minor cosmetic issues throughout, so I am fixing it up throughout my first few months here.

What was the outcome?

House hack is currently performing successfully. It is still in the early stages, but the big items (AC, water heater, roof) are all fairly new and should not need repairing soon.

Lessons learned? Challenges?

The minor repairs add up. They're a constant upkeep until I am comfortable with the work that has been done. I also should have tried to get the property at a slightly lower price, but I am satisfied with the situation.

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

I worked with a real estate agent and property manager Wayne Songy, Jr. of Wayne Songy and Associates. He was an excellent point of contact, provided useful advice, and ensured the deal was completed on time.