Surprise house hack as first purchase

[Joe Stone]

Investment Info:

Single-family residence buy & hold investment in Bloomington.

Purchase price: $101,000
Cash invested: $20,000

Owner Occupied and working towards my first house-hack. 100-year old former boarding house. Plumbing for three kitchens (one currently functional) and three bathrooms (two currently functional). Had a roommate for the first year. Now renovating, and hope to be ready for tenants in August 2021. Plan B is roommates. Once it is cash-flowing and repaired, I plan to use the equity to purchase another property if I enjoy this process. So far it is fun.

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

The price and location was hard to turn down. Houses go for twice what I paid in this neighborhood.

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

I was actually a tenant at this location with two other roommates. The landlord approached me, named his price, and I said yes. I wasn't even pre-approved or looking. I was just living cheap and saving as much as possible for opportunities, and it presented itself.

How did you finance this deal?

20% down and mortgage for owner-occupied.

How did you add value to the deal?

I took it as-is. I believe this is considered no contingencies? I learned the basics of pouring concrete and trimming trees immediately, in order to please the insurance company. The house is filled with junk from the former owner and tenants and I'm learning all about which donation/recycling center take which materials.

Lessons learned? Challenges?

The house needs a lot of work, and most of it is sweat equity, but I'm warming up to HELOCs/Refinancing to move faster. I was debt-free before this purchase, but I'm hoping to pivot towards being employer free if I can make the numbers/lifestyle work in the next few years. So... There will be lessons, I'm sure, lol.

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

This was an unlisted FSBO, with the owner approaching the seller. Shelly Baumgartner at IU Credit Union made it easy and was patient with my questions and running numbers.