Buying my first house hack! (Durham, NC)

[Garrett James Corwin]

Investment Info:

Single-family residence buy & hold investment in Durham.

Purchase price: $429,000
Cash invested: $20,000

New construction of a SFR, 4 bed/3 bath in South Durham. My realtors and I managed to get under contract before the property was put on the market; two months before completion. I'll be house hacking the property while living with three other Duke graduate students. The monthly cash flow is ~$0 during my occupancy, but it could be as high as $800/month when I move out. There's a detached garage that could be turned into an ADU in the future, increasing the cash flow by another $1,000/month.

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

I was looking to reduce my living expenses and take an easy first step into REI. New construction, although hard to find, fit my situation the best because I didn't have to worry about the hidden costs of buying a resale - roof replacement, renovations, etc.

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

My realtors found this off-market property because of their relationship with the builders. There was no negotiating. Since it was an off-market deal, I didn't have to compete in this crazy market. The builders had a predetermined sale price.

How did you finance this deal?

Family money, but we will eventually finance with a bank loan in a couple of months.

How did you add value to the deal?

The property comes with an unfinished, detached garage. I'm having it finished with more electrical, a simple waterline, insulation, drywall, paint, and a mini-split unit. I'm also furnishing all of the common areas in the house, which allows me to charge a premium for rent. I plan on adding an ADU above the 2-car garage in a couple of years.

What was the outcome?

I'm receiving $2,400 in rent across the three extra bedrooms.

Lessons learned? Challenges?

Timing, timing, timing.
I knew I wanted to create a home/environment for graduate students and young professionals. Graduate school at Duke starts mid-August, and I was/am still rushing to find tenants, complete the garage renovation, furnish the house, etc. between a June 30th closing and an August 1st move-in date.

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

I highly recommend my realtors, Mary Hunter and Darlene Papitto, at Durham Urban Realty. It was also a pleasure to work with the builders/sellers, Durham Building Company.