First Property House Hack

[Tyler LaVoie]

Investment Info:

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

Purchase price: $210,000
Cash invested: $21,000

Bought this property as a house hack using an FHA loan. Three units all 2-bed 1-bath. Two units we in very good shape but I knew going in one unit needed work as the tenant was a hoarder. Not having a background in construction or home improvements made it difficult to judge what needed to be done or to identify the signs of underlying issues. I was able to move into the hoarder unit and replace flooring to be able to move in and fixing smaller issues while living in the unit.

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

Being able to house hack was the main reason I wanted to get into this type of deal. Then after reading bigger pocket forums and listening to the podcasts I realized I could house hack as well as cashflow at the same time.

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

I started by interviewing real estate agents to find one that would understand my goals as an beginning investor as well as have insight and advice on property management. I was originally looking in the Pullman/Moscow area (college towns) but housing/rental prices did not satisfy the 1% rule. So I suggested looking into Colfax, which is about 15 minutes away and lend to working professional renters rather than students. My agent was able to negotiate $11k in sellers credit.

How did you finance this deal?

I used an FHA loan with ~7% down. In hindsight I should have just put the minimum of 3.5% to have more working capital to be able to fund other deals.

Lessons learned? Challenges?

In hindsight I would have made it contingent on having one unit vacant to make the moving process easier. Another challenge was that one unit had more damage that was not noticable until we began remodeling the unit. Next time I will have a better idea of the signs to look for and what it takes to resolve those issues.

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

I worked with Story Real Estate in Moscow, ID. My agent was Emma Story and she did a great job. She was patient and worked tirelessly to find me a property that matched my criteria. The lender I used was Brandon Allen at Synergy One Lending. He was extrememly helpful and was able to make the first time home buying process easy to understand by laying out multiple options to close the deal.