My Wife Wants to Buy More Real Estate After This Deal!

[Trent Werner]

Investment Info:

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

Purchase price: $575,000
Cash invested: $120,000

This duplex "House Hack" is the deal that got my wife committed to real estate! I convinced my wife to owner-occupy one side of a duplex as our first purchase and now she wants to keep buying more real estate! We bought a side-by-side duplex because we wanted to reduce our monthly housing costs. We inherited tenants from the previous owner that were not the best tenants and ended up moving out about 10 months after we bought it. The tenants trashed the unit so we installed new floors, countertops, light fixtures, faucets, and painted the entire unit by ourselves. We spent about $6000 in materials renovating the unit and re-rented the unit for $150 more per month during the winter.

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

This purchase was a way to compromise with my wife on our first real estate investment. I wanted to owner-occupy a small multifamily property and she wanted to live somewhere that is "nice." Our unit was updated by the previous owner which fit my wife's criteria, so I got to buy a duplex! This was a great "starter" duplex that did not require very much work at the beginning and I was able to introduce my wife to the best thing on Earth, which of course is investing in real estate.

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

This deal was listed on the local MLS. It was listed for $600,000 and we ended up paying $575,000 after negotiating the price with some items that came up during the inspection.

How did you finance this deal?

Since we were going to owner-occupy one unit we used a 20% conventional loan program.

How did you add value to the deal?

Renovated our other unit and increased the rent.

What was the outcome?

We reduced our monthly housing costs significantly compared to us paying rent somewhere else. When we move out and rent our unit, we will cash flow about $500-$600 per month.

Lessons learned? Challenges?

The biggest challenge was finding somewhere that my wife not only wanted to live but felt excited about living. As much as I wanted a multifamily property, I did not want to hate where we lived and this was a great opportunity to enjoy our home and have it be a good investment too.

The biggest lesson I learned was inheriting tenants is usually not going to work out. Sometimes inherited tenants may not be up to your standards and can cause problems soon after you buy the deal.

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

Liz Soucie with Fairway Independent Mortgage is incredible and gets deals done. She has helped numerous of my clients invest in real estate!