All Forum Posts by: Josh Cook

Investment Info:

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

Purchase price: $405,000
Cash invested: $14,175

Purchase in 2020 for my second house hack!

Following here, @Chantel were you able to find an updated MN lease that incorporates the 2024 changes?

I'm an Engineer and just have one rental, hoping to do more. Both my friends from college are engineers and invest in real estate as well. 

Hi @Parteek G. I would have them sign a lease with you if they are okay with that which shows the rent amount and then set up another bank account to keep track of your income and expenses. This will help prove to the lender a year down the road from now that you do have rental income to offset living expenses to help you qualify for your next investment property once you have the funds or other means to pay for it. 

Just curious, what is our long term plan for the house? 

@Eric Schmid congrats!

@Patrick Menefee congrats! Maybe I am missing something here but can you please explain how you will be able to pull out of your cash out less the rehab costs? 

If the purchase price is $160,000 at 25% down, then you would have $40,000 into the deal, not including other closing costs and the rehab costs. Assuming you are able to refinance for up to 75% of the ARV value then you would get a loan for $153,750 letting you pay back your $120,000 mortgage from putting 25% down on $160k and pocketing $33,750. So you would come up short about $6,250 from the original $40k you had to put in. Am I analyzing this correctly? If so that still seems like a great deal as you would be all in just over $21,000 out of pocket with 25% equity in a cash flowing property!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in St Louis Park.

Purchase price: $312,500
Cash invested: $37,775

Cash flowing house hack. Purchased as side by side 2/1 and turned one unit into a 3/1 to make this property cash flow while living in it.

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

The desire to live rent-free and eventually become financially independent and retire early (or have the option to retire early). I wanted to move out from living with my parents after I finished paying off my student loan debt but still wanted to be able to save a significant portion of my income. House hacking was the channel that allowed me to do this.

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

Found on the MLS. Negotiated through my realtor. The offer was accepted $10k below list price, further negotiated down it after the inspection.

How did you finance this deal?

Conventional 5% down lender-paid PMI. Paid for the renovation in cash.

How did you add value to the deal?

Added a bedroom and family room by finishing the basement in 1 unit. I acted as the GC myself and subcontracted out the trades requiring licensure.

What was the outcome?

This allowed me to cash flow while living in the property when it is fully rented out. I am now able to save up for my next property.

Lessons learned? Challenges?

Deal with water problems prior to finishing the basement. The week after I finished the basement and had a renter move in the basement flooded. I had to rip up the brand new floor and trim and address it.

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

N/A.

@Dirk J Mc Kenzie Hi Dirk! As those guys mentioned above there are some great local meetups. Let me know if you want to chat real estate over coffee sometime too!

@Yonah Weiss

I have a BS in Geological Engineering and Geoscience and a minor in International Engineering. It only helps with the numbers. 😅 Wish i has known about REI before I went to college but I have one duplex now and am looking for my next acquisition!

@Jack Nguyen I also use Cozy. Works great!