Accountant getting into House Hacking

[Matthew Cervoni]

Investment Info:

Single-family residence buy & hold investment in Nashville.

Purchase price: $255,000
Cash invested: $2,500

Before I started house hacking I was paying roughly $1,000 in rent. Now I own a 3 bedroom house which I was able to get into for just $2,500 down using a program in TN where you can get a $15k interest free loan towards your downpayment & closing costs if you meet a certain criteria

The rent is $650 per room, which ends up being $1,300 in rental revenue per month. After my expenses, my true cash flow is - $250. Once you factor in my rent savings, it becomes$750 per month! That is a 360% ROI!

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

I am an accountant who does bookkeeping & tax planning/filing for real estate investors. I figured the best way to understand the business was to have first-hand experience with real estate and then apply my tax knowledge. So far this experience has helped me better understand my clients and increased my savings rate to 65%!

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

I used the MLS and an agent to find the deal. We were very patient and looked for almost a year before finding a house that fit my criteria with motivated sellers.

How did you finance this deal?

Conventional loan - 5% down

How did you add value to the deal?

The property was turnkey with very few repairs needed (if an accountant can fix something, I consider that minor). I think it is a myth that in real estate you always have to buy a property that needs repairs. If you can negotiate a good price that fits your investment criteria, it only gets easier the better condition the home is in!

What was the outcome?

65% personal savings rate
First-hand real estate experience that was manageable with a full-time job & side accounting business
I can better serve my clients as I build my own real estate portfolio to understand their challenges
2 new friends (my roommates)

Lessons learned? Challenges?

The two biggest lessons learned was: 1) Real estate is not all about buying properties in bad condition and fixing them up. If you don't have the stomach for that be patient and find a turnkey property that fits your investment criteria and you will still have an amazing portfolio. Less headaches & solid returns. 2) If you are house hacking in a single-family home, you are just as much selling yourself as you are the property when looking for tenants.

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

N/A