Our First House Hack!

[Michael Hayes]

Investment Info:

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

Our first home and house hack is a small duplex built in 1945, 2 blocks from the beach. The bottom unit is where my wife Jesslyn and I live (450 sq. ft. - 1BD 1BT) and the top unit is a STR through Airbnb (850 sq. ft. - 2BD 1BT). The units are completely separate but share a single meter.

Link to Airbnb: https://airbnb.com/h/thesunriseshack

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

My wife Jesslyn and I are inspired by four friends, Grant & Laura Desjardins and Joe & Michelle Prillaman, who both house hack in Carolina Beach, NC. I think we can all agree though that BiggerPockets® has played a huge role in helping us get to where we are today too. It wasn't until Winter of 2019, when Grant introduced me to the term "House Hack," and then proceeded to purchase me a copy of Scott Trench's "Set For Life." Surprisingly enough, it's the first book I've finished since 3rd grade.

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

We found this deal off-market and had been searching for 1 year and 3 months. The previous owner had gone through rigorous renovations in 2018, and again in 2021. Due to the rising housing market, we paid full-asking price. It helped that I've lived in the area for the past 22 years and that this was our first home. Otherwise, I don't think the previous owner would have sold.

How did you finance this deal?

Conventional Fannie Mae HomeReady with 3% down.

How did you add value to the deal?

Previously, there was only one parking spot in the driveway so we added an additional driveway to the right which allows for two more cars. We grounded all the outlets and replaced the 30 year old exterior electrical panel. Stained the backyard fence and deck, painted all the interior walls and trim, and updated all the door knobs for a fresh modern look.

What was the outcome?

We have learned so much in our first 6 months as first time homebuyers, investors, and Airbnb Superhosts. We listed our home on Airbnb May 16th and had our first booking in 10 minutes. Within 30 minutes we had a booking for the same night we listed. And within the first 9 days of listing, we had accumulated enough bookings to cover our mortgage for the year.

Lessons learned? Challenges?

Our biggest challenge and hurdle so far has been flood insurance since we're at 4.2ft elevation with a ground level unit. It is expensive and significantly higher than we had originally planned. Even with this hurdle, house hacking makes so much sense and we are thankful to live here!

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

We worked with Mark Tippett, our mortgage broker at Seaside Mortgage and Jesse Canady, owner and broker at Salt + Stone Property Group.