$0 down on a duplex in NJ and Living for Free.

[John Walter]

Investment Info:

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

Purchase price: $535,000
Cash invested: $12,000
Sale price: $545,000

Purchased a duplex as a house hack in Elizabeth, NJ. This was a new construction, which was delayed nearly nine months for whatever reason. In the end, it worked out in my favor, as COVID has dramatically pushed prices up in my area. Other new builds in less attractive parts of town are selling for over $600k, which is great for me.

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

I really wanted someone else to pay for my mortgage. I am only a few miles from NYC, so the cost of living is through the roof. My goal was to eliminate my largest expense.

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

This new construction was available in the neighborhood where my family lives. It also just so happens to be three blocks from a train station with direct access to NYC (currently under a $70+ million renovation). Asking price was $545k; my realtor suggested I offer $555k because of the hot market. I decided to offer $535k and that was immediately accepted.

How did you finance this deal?

I used a VA Home Loan through Veterans United. Typically, Veterans Affairs charges the VA Funding Fee with mortgages, which would have equated to over $11,000 for my property; however, because I have a disability rating, I was exempt from this. In the end, I put $0 and had the other unit rented a month before my first mortgage payment was due.

How did you add value to the deal?

This was a new construction so I was able to choose my own finishes and pick upgrades where I thought appropriate. Since closing, I have made upgrades to the backyard, as I will be living in one of the units.

What was the outcome?

I am living for free.

Lessons learned? Challenges?

The importance of a good team and having those you can trust on your side. Choose a realtor with some experience. Ask questions and do not settle.

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

Rob Weigand, my loan officer, from Veterans United is a Rock Star. He was the only solid member on my team. He provided fantastic service, advice, and prevented me from erupting on my realtor more than I ended up doing.