Entering the world of LTR with a House Hacked Duplex

[Tabitha L. Cox]

Investment Info:

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

Purchase price: $166,000
Cash invested: $23,000

House hacked this duplex. Living in one side for a year or so before renting it out. Current long term tenant is paying well below market value rent. When able to rent both sides for full market value pure cash flow should be between $200-$300, but goal is to pay off loans and hold LTR investments as part of retirement plan.

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

Wanted to start the LTR investment journey and house hacking made the most sense with other variable we have in play.

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

I'm a realtor and this was listed on the MLS. It appraised for $9k more than I paid for it, which made me happy. Needed minimal work.

How did you finance this deal?

Traditional conventional mortgage for an owner occupied property.

How did you add value to the deal?

Currently this is about saving me money on my house payment. But will be updating the kitchen and bathroom of the unit we are living in next year as I ready it to rent out to someone else. Units have been rented for $700 but with updates this unit can rent for $900/$950. The current tenant pays $700 but that unit can go $800/$850 in the future.

What was the outcome?

Accomplished the goal of saving me money, as well as, entering the world of LTR in a way where systems can be established and learning happen in a small controlled way before embarking on bigger investments and using OPM.

Lessons learned? Challenges?

Should have had a little more thorough inspection process done. Would not have changed what I did, but would have made planning easier.

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

Just myself, and my local lender Dart Bank, who I've used for all my real estate financing so far.