House Hack on Maui (Hawaii) - Triplex

[Josh Conlan]

Investment Info:

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

Purchase price: $831,725
Cash invested: $85,000

Contributors:
Micah Cabagbag

3 unit property located on Maui, HI purchased as a house hack. My partner, Micah and I invested our capital 50/50 and split profits evenly. After expenses and setting aside reserves, we are cash flowing ~$1,500.

3 units are a Studio, 3*1 and 5*2. Micah is living in one of the rooms.

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

Micah and I have known each other since high school and have always talked about investing in real estate together. I live in Seattle and Micah on Maui - we wanted to find a house hack in either location so that we could manage our first investment. Micah found a couple great deals out in Maui and we decided to join forces.

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

We found this on MLS. Initial asking price was $875K but it had been sitting on the market for 60 days. We came in at $825K, eventually settling at $831K. The house appraised for $915K independently 4 months prior to sale.

How did you finance this deal?

We utilized a low down conventional loan. We initially thought we'd only have to put down 3%, but the loan limit for a jumbo loan at the time was $765K. We came out of pocket the difference between the loan limit and our selling price, ~$66K. We spent a little more on this deal upfront, but we had sufficient capital and the numbers still made sense so we decided to go ahead.

How did you add value to the deal?

Within hours of getting the keys, we quickly went to work painting the units, replacing older appliances and hiring a plumber and electrician for some minor repairs. We had all 3 units rented by the end of the month, but plan to do larger renovations/repairs in the future. Our front yard was purely dirt so we put down gravel and transformed the front yard into a functional area for our tenants.

Lessons learned? Challenges?

The first time going through the home buying process was daunting. We had a great team of realtors and loan specialists helping us along the way. Looking back, there was no better way to learn this process than by doing.

Micah and I had a goals and strengths meetings upfront to understand what each of us brought to this deal (outside of the cash). We decided on roles and responsibilities and continually communicate which has paved the way for a great partnership!