First Investment House Hack

[Jody Dolansky]

Investment Info:

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

Purchase price: $134,000
Cash invested: $8,000

First investment - house hack! Bought this 2-unit off market for $134,000 using an FHA loan. I currently live in one unit and rent out the other. Mortgage payment is $1040/month; my tenant pays $900 for rent and also their own water/sewer and electric. I pay for trash and heat (since whole house is one heating zone). Utilities included, my cost of living is less than $300/month, which is helping me save for my next multi-family.

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

Way cheaper than if I had just rented an apartment myself, and setting me up for finacial success/freedom

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

I am a Realtor, so the owner came to me to list it. I said how about I just buy it!

How did you finance this deal?

FHA loan with 3.5% down, did a 4% seller's assist so at settlement I paid about $8,000. Put around $5,000 in to make the first floor livable.

How did you add value to the deal?

Saved the owner the stress of listing it on MLS and dealing with arranging showings with his current tenants. He was at the end of his rope trying to manage this property while living out of state, so he was grateful for a quick, easy transaction.

What was the outcome?

Deal closed successfully, old tenants (who were paying $600/month) stayed for a few months and then moved out. I raised rent and found new tenant through Zillow.

Lessons learned? Challenges?

Learning now: pay the extra money to put electric baseboard in instead of footing the entire oil bill if the house is on one heating zone.

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

Jeff Kraus at Mortgage America did my loan. I've worked with him a lot over the past few years and he is great.