Meriden House Hack #1

[Ryan Newport]

Investment Info:

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

Purchase price: $277,500
Cash invested: $18,000

House hack #1

Current cash flow: $2000/mo (2 of 3 units)
Projected Cashflow after move out: $3400/mo

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

House Hacking is a great way to minimize expenses, obtain property for very low money down, and learn the ins and outs of property management.

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

MLS. Leveraged my FHA offer with attractive contingencies and was able to use a lower appraisal to reel in purchase price. Also my agent is the man. His diplomacy and responsiveness played a large part in closing this deal.

How did you finance this deal?

Combination of FHA and private money. FHA appraisal came back VERY low and all parties thought poorly of it. I put my 3.5% down and added a 5k buffer above the appraisal and borrowed the remainder through private sources on a 3 year term amortized over 5 years. This allowed me to keep my monthly expenses manageable and still close a deal. After the 3 year private money loan is paid off the property will cash flow very strongly.

How did you add value to the deal?

It’s fairly turn-key. We replaced some carpets and did cosmetic sprucing up.

What was the outcome?

Living comfortably for very low expenses and enjoying it. Stacking extra money each month to prepare for another house hack next year!

Lessons learned? Challenges?

This deal had headache after headache related to appraisal and financing and closing delays. Definitely remaining persistent and relentless was valuable for me on this deal.

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

Agent - Stephen Cornell // Berkshire Hathaway