My First Deal / House Hack!

[James Konvalinka]

Investment Info:

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

Purchase price: $230,000
Cash invested: $9,900

This was my first investment property that I am very excited about how it turned out!

I bought the duplex in July with an FHA loan and am currently house hacking the upper unit

The home is a 2/1 upper and lower and currently renting the lower unit while living in the upper.

My goal for this property is to remodel my unit while I live here so that I can rent it out and continue my journey by buying another duplex or 4 unit and doing the same process.

I will be adding an in unit laundry room, redoing the kitchen and refinishing the floors throughout the unit. The bathrooms were already redone before purchasing.

As it currently sits, I am renting the lower for $1425 with 2 single car garage spaces and a Pet. My mortgage is roughly $1700 (including Taxes & PMI) so after everything I am paying about $300 a month for the property.

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

At the time I had just graduated college and was living at home with my dad. I was very motivated to get into real estate and out of my dads house. So I took a job as a property manager and learned about the market that I was looking to invest into. I loved the idea of house hacking because it gave me the opportunity to move out on my own, buy a multifamily property and be able to reduce the amount I pay on my mortgage all while still creating equity and getting first hand experience in managing

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

I found this deal on the MLS. I was actually looking at a property that was in the same neighborhood and I did not like the property I was looking at. But I remembered seeing this one on the MLS. I took a little drive after my showing to come and see it and really liked the property. When I went for my first showing, the owner told my agent they were going to knock $10,000 off the listing price. So I just made a full price offer and negotiated some credits at closing.

How did you finance this deal?

I used an FHA loan 3.5% down.

How did you add value to the deal?

Currently in the process of the value add - but am going to do some remodeling to the upper unit. Adding an in unit laundry in the very large back pantry. Also will be updating the lower units bathroom and kitchen.

What was the outcome?

Outcome has not been reached yet but will update when it has been!

Lessons learned? Challenges?

So far there have been a few challenges. I was not sure if the FHA would finance this deal due to a few of the stairs not being up to code. Although, they were still able to fund the deal without having to fix any of the issues!

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

Yes! I worked with Charlie Hutchinson from Houseworks Collective. He was a great source of information as well as an awesome person to work with. He was knowledgeable on house hacking since he has done a few himself and was able to provide a very high quality of service and expertise! Highly Recommended!