All Forum Posts by: Emma Whear

Good idea. We ran it past our real estate agent and lender — but I'm all for shoring up. Thanks for your insight! 

Hi Jaycee! The plan is indeed to house-hack. I live in a small town with a college (26,000). A large number of the homes were unofficially converted into duplexes in the 90s/00s (though kept as SF in the official zoning). This is one of those, as is the neighboring properties (all of which operate as duplexes, though officially are noted as SF). From my best understanding, the city zoning committee seems to turn a blind eye to it (due to the need for housing for students). If it came before the counsel, we'd be able to argue with a pretty strong case based on the dual-use of almost the entire neighborhood.

Investment Info:

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

Purchase price: $417,500
Cash invested: $37,575

Technically a single family by zoning, though set-up to be a duplex, with 3 beds and 2 baths per unit.

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

We weren't super happy with anything we were seeing on the market, so my husband and I had just started writing letters and looking off-market... until we saw this property.It'd been sitting on the market for months. We currently own two other duplexes and we've house-hacked all of them. Each one has been a step up as far as space, location, and lay-out. This one is a big improvement because we'll gain a lot of space, a more "house-like" layout, and a garage, and a third bedroom!

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

A real-estate friend and then our agent, Jordan Clemans.
Because of where interest rates are at—and how slow everything is moving—we basically made a "take it or leave it" deal.

How did you finance this deal?

Conventional loan.

How did you add value to the deal?

We came in low with our offer, but were willing to skip the inspection (which had already been completed before we offered) and stipulated that we would close in 20 days, which was super valuable to the seller.

What was the outcome?

We offered 407 and asked for closing costs. The sellers countered at 450 and closing costs. We gave a final offer of 417,500 and closing costs, and they accepted.Currently in the middle of new floors, a new bathroom, new kitchen lay-out, new trim—after completing tons of demo.

Lessons learned? Challenges?

Every time, there is new little things, especially in the financing process.
Insurance was way more expensive this time—which I've heard is a nation-wide phenomenon—and it's the first time since the NAR settlement that we've purchased, so we had to cover part of our agent's compensation.

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

Yep!
Josiah Rosendahl at Fulcrum Home Loans
Jordan Clemans at Story Real Estate

Investment Info:

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

Purchase price: $370,000
Cash invested: $55,500

Fun little duplex! Purchased this to add to my portfolio. Has a great backyard and very standard inside units with two beds + 1 bath and great south-facing windows.

As soon as we took possession, we painted the top unit and switched out light fixtures + outlet covers.
Planning to do the same to the second unit in August.

We've been doing lots of landscaping and plan to:
-replace the front fence
-replace the shed
-paint the outside
-add better ventilation through the roof

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

At the time, we were living in our other duplex. While that one cash-flows better, it doesn't have any sort of yard and the privacy is limited since it's surrounded by multi-family properties.
I have two toddlers so I was looking for a property with a yard and with more privacy!
Plus, it's near family.

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

Found it online.
I Initially offered pretty low, was rejected, and then waited about a month until they countered much closer to my offering price.
Also, the terms of our offer were pretty ridiculous because it was contingent on:
-Us finding two sets of renters and signing leases (in order to get the financing in order)
-The owner of the offered-on property buying-out one set of his tenants
-Us being able to move in within 60 days of closing

How did you finance this deal?

Conventional Loan. 30 years.

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

Jordan Clemans at Story Real Estate! I used to be a real estate agent, but let my license lapse when I became a mom.

Investment Info:

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

Purchase price: $385,000
Cash invested: $57,750

Bought a duplex in a pretty hot local market. Definitely not a "steal," but the best we could do for now. My husband and I plan to live in the back unit and fix it up. Ideally, the front unit will make a pretty cute Airbnb which I'll manage. We'll see if that works out – have to convince a new tenant not to take possession for that to happen. Planning on doing a pretty big rehaul: new floors, new bathrooms, majorly update kitchens, lighting, full paint (inside and outside). Pumped!

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

I love duplexes. Lots of win-win scenarios.

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

My friend (and agent), Jordan Clemans. Personal letters, a fine-tuned inspection response, and holding our cards close.

How did you finance this deal?

Conventional loan. 15% down (due to the duplex requirements).

Lessons learned? Challenges?

This was a curious one. Buying in my hometown, but we were out of state when we offered. I'd seen the house two years before (while I worked as a real estate agent) so I generally knew what it looked like. The day we moved to town and were supposed to see it, I was in the ER. We didn't get to see the inside until the final walkthrough. Didn't bug me, but not for everyone. Better than expected!

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

Jordan Clemans, Story Real Estate
Brandon Allen, Synergy One Lending

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Moscow.

Purchase price: $206,300
Cash invested: $10,900
Sale price: $260,000

I didn't buy this property planning on flipping it. When I purchased it, my plan was to fix up the nasty downstairs unit to a level that I could live in it, and then slowly get better and better tenants upstairs.

Then... I got married in 8 weeks and we decided we should move to Kentucky.

Praise God for flexibility in real estate.

It's quite a blessing at our age (we are both 22) to walk away with ~$40,000 (once we paid back a $50,000 down payment loan to my grandparents) pre-tax. That money will go far with us in Kentucky.

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

I'm a real estate agent, but Bigger Pockets especially got me pumped for a duplex.

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

I was the agent and buyer when I bought it, and then the seller + listing agent + buyers agent when I sold it.

How did you finance this deal?

Conventionally with a friend who is a mortgage broker, and then privately with my grandparents for the down payment.

How did you add value to the deal?

Flipping a nasty basement. The biggest thing was gutting a 5 x5 bathroom and making it a 10 x 5 with all new appliances, paint, walls, etc.

Lessons learned? Challenges?

There are a few of the fixing projects we wish we hadn't done. Chiefly: flooring (vinyl and not plank). We wish we had either gone for a plank type flooring or paid someone to lay the vinyl.

@Account Closed. You are EXACTLY right. After talking to a CPA, turns out I'm in the lowest tax bracket (good and bad news, right 😂) and therefore the taxes would be 10% of the capital gain. That's a hit I'm willing to take for a little more time and luxury to look, instead of the restrictions of a 1031 exchange. If the taxes were significantly higher, you bet I'd be hustling a bit more to do the exchange.

Thanks for taking the time to respond!

@Kade Lucero Thanks for your replies! It's called being a "dual agent" in Idaho, and isn't illegal, as long as it's declared. 

I agree with you regarding the index fund and taxes question. After everyone's advice, and then talking more to a 1031 expert, sounds like my best option is to pay the taxes (since I'm currently in the lowest tax bracket) and then buy a house in Kentucky when I'm ready. 
Because I owner-occupy a duplex, only half of it would be considered "investment" for the purposes of a 1031, and I haven't lived in my half for 2/5 last years, so no tax cut there. 

@Michael Seeker Love it! Thanks for taking the time to respond. Looking into all of these factors. 

@Jody Young I'd love that! Haven't bought yet - plan to take an online course. Looking at "The CE shop" currently.