All Forum Posts by: Lance Blight

Investment Info:

Townhouse buy & hold investment in Davison.

Purchase price: $112,500
Cash invested: $29,000

This is my first purchase! I found a beautiful townhome to house hack just outside downtown Davison MI and scooped it up.

Listed at 110,000, offered 112,500 with me keeping some furniture and they accepted.

I've moved in with two of my friends and with them here, my housing expenses are now around 200 bucks a month. I could've moved in some others for a bit higher rent but I'll take the hit to the cash flow if it means I live with someone I know.

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

House hacking has interested me for a LONG time. Even if this is as far as I go into REI (it won't be), I am very excited to have no housing expenses to free up cash for other endeavors.

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

Found it about 6 hours after it was posted on the MLS, listed at $110,000. Realtor (shoutout Bradley Labrie!) took me through the next day. We made an offer of $112,500 on the way home from the showing and the seller accepted.

How did you finance this deal?

Conventional financing. $89,600 loan at 3.75%. $22,900 down and a bit more to close brought closing costs to just over $29,000.

How did you add value to the deal?

None yet. I plan on a hard-wired gas grill on the deck, installing a heating vent in the somehow ventless basement, and that's really about it.

What was the outcome?

So far, so good. I've moved in with two roommates who pay a combined $900. It brings my housing expenses to about 200 bucks a month. Once football season is over and I cancel my online cable it will come down even more.

Lessons learned? Challenges?

Move fast. It's a crazy market right now and I had to move fast to secure this place. Have your pre-approval in place, have a team ready, and ask for help from that team as much as you need it.

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

Bradley Labrie 100%. I was recommended him by a friend of mine and I also really liked the fact that he is an investor himself.

I thought Lindsay Hunt at Icon Mortage in Flint did pretty well. I don't have anything to compare it to but I had a decent amount of unemployment in my recent history and she made the numbers work. I'd go there again.

@Shaun McPeck - I stayed in an Airbnb for Lollaplooza in Avondale and liked it! I think Logan Sqaure is a little more in the middle of things, and that’s definitely where I’d like to be. I’m open to anything on the blue line from The Loop to O’hare basically.

Thanks for the replies and the warm welcome everyone!

@Alaina Korreck - Small world! I am leaving NMC's aviation program with no student loans and about $35k to work with. Ideally I would live in the unit for at least the year to satisfy the FHA loan and then move on to another property. I'll probably be 21 by the time this all goes through, but I'm excited to start so young; I feel like I've got the whole world at my fingertips!

@James Wise Thank you!

@Clint Bronder - I've been lurking and reading a ton, but the time to jump in headfirst is coming soon! 

@Nick Klomstad - I definitely am going to throw some formulas into excel just to speed things up once the time comes a little closer. I don't expect positive cashflow only renting one unit of a duplex, but after I move out and tenant my unit I definitely should be. Fortune favors the bold!

@Andrew Goodwin - That is the scary part. I would much rather be paying "rent" to myself versus a landlord, but a long term vacancy or multiple big repairs would hurt bad. Ideally I'll break even while I'm living there, and then cashflowing good after I tenant both units. We'll see, I'm excited.

Hello everyone! I am a 20-year-old pilot who is currently living in Traverse City, MI, originally from Flint, MI. I'm about to finish college, and I'm looking to move to Chicago. Depending on which job I take out of school, that could be as soon as 3 months, or as much as a year and a half. My journey to BP started on Reddit. I'm an avid follower of financial independence blogs, which then brought me to real estate investing. My goal right in the next 5-7 years to have a multi-family home that I live in and rent part out, as well as a property located in a beach town that I can AirBnB and use as I please.

My first purchase will most likely be the multi-family home which I can then "house hack." I'm not a huge fan of roommates, especially people I don't know, but don't think I'd mind a multi-family home since I've had to deal with apartment/dorm living all of college and it isn't that bad. I'd love a home with a 1/1 or possibly 2/1 for me, and then another unit or two to rent.

I'm going to have roughly $25,000 for a down payment on an FHA or traditional mortgage, leaving about $10,000 left over for any major problems that come up. I'll keep that extra $10,000 for any problems, but ideally, the unit I'll be renting will be turnkey; renovations on mine are ok. What worries me though is that some of the price points just don't make sense. I know that some deals don't even make it to the MLS, but the rent prices just don't make sense compared to the purchase price.

This brings up my biggest question - Is it still house hacking if you have negative cash flow? I may very well may be $500 short of my mortgage each month, but that still seems very nice to me. $500 plus my share of utilities to live in Chicago? I know it isn't cash I'll see in my pocket, but that sounds like a solid investment, but I've got to be missing something. The ideal location for me would be within walkable distance to the Blue Line, anywhere between the Loop and O'hare, with a focus on Logan Square. I'm having trouble searching the forums here for relevant threads as I don't see a search bar, but I found one through google that seems to say it's doable. 

My goal isn't to really retire early at this point, just financial independence, but I'm sure that will change with time. I look forward to connecting with you all!