I bought my first house and investment property!

[Lucas Dubs]

Investment Info:

Single-family residence other investment.

Purchase price: $333,000
Cash invested: $15,331

I bought a house with an FHA loan and I'm house hacking it. I rent out rooms in the house just enough to cover the mortgage. Sellers paid closing costs all I paid was a down payment and $4,485 to re plumb the entire house because it had polybutylene pipes. I plan on putting in a bunch of sweat equity into the property before I sell or move. Right now it appraised for $339,000

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

House hacking seems like the best bet for me while I transfer out of the military and start going to college.

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

My girlfriend lives here and works as a personal trainer. One of her clients is a real estate agent and they became close. I used her to find properties and facetime me for walk throughs while I was still stationed overseas. The negotiating part was simple due to the sellers being extremely easy to work with. Anything I wanted included with the house they agreed to.

How did you finance this deal?

I used an FHA loan with a Co-signer. I would have rather used a VA loan with 0% down but because I'm getting out of the military and have less than 2 years experience as a property manager not much of the income I'm making could qualify for a loan.

[Alex Grosvenor]

Congratulations on your first deal! It is a huge step into financial freedom. As a former member of the Army I can say it is incredibly impressive to see somebody looking at homes while overseas. 

The only thing that worries me about the deal is have you found people to rent out rooms already? Do you KNOW what you can get for rents or are you just guessing? have you talked to multiple property managers to get an accurate rent estimate for those rooms? Who is paying for electric? Water? Lawn care? Garbage? HOA (if any)? Trash? Who is cleaning what? If you're paying for a cleaner is that factored in all of the prices. If you are managing the property and not using a property manager do you have an attorney approved lease that you are having the tenants sign?

I don't want to scare you or for you to back out of the deal. I would just hate to see you do all of that work just to not rent any of the rooms out. If you do know all of those things and those numbers work congratulations! It is going to be a wild ride. If not then seriously get deep into the deal and figure out how to make it work.