Washington DC Duplex Purchased with 3.5% FHA Primary Financing

[Cassidy Burns]

Investment Info:

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

Purchase price: $854,000
Cash invested: $30,835

My final Washington DC house was just purchased! I'm now at 4 units in Washington DC using primary residence financing. This duplex I just purchased as a primary residence! Legal CofO in the basement which makes its a legal Duplex in NE Washington DC. 4 Blocks from H St. Corridor and 3 Blocks from Union Market DC.
I purchased this using FHA 3.5% Down Primary Residence Financing. I will live in the unit for the next 1-2 years and then turn it into a long term rental.

The Numbers:
-Purchase Price: $881,000
-Seller Credit: 3% (seller covered all closing costs)
-Net Price: $854,000
-Appraised Value: $890,000
-Net Gain of $36,000 based on the initial equity from appraisal.
-Mortgage: $4,901/month (PITI + Mortgage Insurance)
-Lower Level: 1 Bed/ 1 Bath Has a tenant currently for $1,225/month. I will be raising this rent to $1,550/month to get to market once that unit is turned over.
-Upper Level: 3 Bed/ 1.5 Bath Projected Rents: $3,600/month
-Total Projected Rents: $5,150/month

So now I purchased a primary residence using 3.5% down ($30,835) and have a break even / cash flowing rental in Washington DC in a growing neighborhood which I believe is going to see more appreciation long term.

House Hacking using creative finance is the best wealth generating tool available!

Cheers

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

Low money down option. 3.5% to purchase a break even / cash flowing asset in Washington DC. I also believe this area is going to continue to grow .

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

Via MLS, I had to escalate the purchase price by $81,000 in order to win the bid. I saw the value in the appreciation, equity pay down, and ability to put low money down.

How did you finance this deal?

3.5% FHA Primary Residence Financing

How did you add value to the deal?

Purchased Under Valued ($36,000)
Will increase rents of lower level basement unit $1,225 -----> $1,550/month

What was the outcome?

Buy and HOLD

Lessons learned? Challenges?

Lots of challenges , DM me for more details

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

Cassidy Burns- BPG Residential