All Forum Posts by: Nick Bruckner

I recently bought a SFH with mother-in-law unit. I have a renter in the MIL. We have normal homeowner's insurance on the property. I've heard that a landlord insurance policy is more expensive than homeowners insurance. I want to make sure we are covering our bases with liability but always like reducing costs when possible. Anyone have experience navigating these waters?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $529,000
Cash invested: $30,000

We moved to Eagle River, Alaska and found a home with an attached MIL so we could afford to get into a desirable area. Added a W/D to the unit and built and sound-proofed a wall between the home and apartment (with built in shelving). We found a renter to offset our monthly mortgage payment by $1,300/month. Lots of potential to build sweat equity here - surrounded by homes with higher values (and beautiful mountains!). The built in shelf in the second pic used to be a door to the home.

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

There are lots of upsides - our mortgage payment was cut by a third and we were able to find a property that will appreciate quickly as we update the home. The home is good sized and has good bones, but has a ton of potential for adding value by doing improvements as we can afford to. It is on one of the biggest lots in desirable area that we couldn't have afforded to move into without a MIL to make the numbers work for us.

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

This home went into contract the first day it came on the market last May, but that deal fell apart when the septic needed to be replaced after inspection. We were able to buy the home at for $45K less than the previous contract just two months later. The seller was offered a credit of $15K for all new flooring in the home (all new LVT). We negotiated the seller to cover $15K in closing costs.

How did you finance this deal?

We used a conventional loan with a co-signer. When we bought this house I was in the midst of switching careers to real estate full time. You need two years of established income in a commission based vocation to qualify the income for pre-approval, so my generous uncle graciously co-signed for us on the loan. We originally were thinking of moving into a 4 plex for a few years but learned that wouldn't work with a co-signer, so we ended up in a SFH with a MIL.

How did you add value to the deal?

I talked to a bunch of friends and family who know the local rental market well (as it was new to me) and learned how much having a W/D in unit adds value (there is only one local laundromat and it isn't great). So I had to do some improv to plumb in a new W/D and connect to gas for the drier. Moved some cabinets. Adding a wall to separate the unit from our home made the apartment more desirable to prospective tenants and the situation tolerable for my wife and kids.

What was the outcome?

We found a great renter in short order. Anchorage has a really tight rental market right now, so we had lots of applicants, and we were able to be picky.

Lessons learned? Challenges?

It's good to have friends and to reach out to people in your network for help. I relied on a friend who is a plumber to tie the washer and drier into the existing plumbing. I did the exhaust for the gas drier. One challenge was the previous owners had cats. It took forever to get the dander out of the unit. Also, couldn't find a curtain rod to span a window 12' wide so I had to make one out of steel conduit. Buying 500 little things to improve the unit for a renter required 350 trips to Lowes.

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

Yes. Had a great experience working with the agent Jamie Rose in Anchorage, who is now my colleague at Vested AK and Loren Bronczyk with Homeowner's Financial Group in Anchorage.

Glad to share. Rents for $1950/month plus all utilities (tenant responsible for snow removal and yard maintenance). We rent to a health corporation that services a region the size of Minnesota. They have trouble finding good housing for health care providers so its a win-win. Our HELOC loan was only $120,000. The home appraised for $308,000 when it was done five years ago, but we only cashed out what we needed to pay folks back at the time.

Not a lot of people use telephone poles, because most people can't afford to build. Even before building materials prices skyrocketed with supply chain issues during covid, all of our building materials were doubled by the cost of freight to get them to our village. It was quite an adventure!

I recently visited my best friend from high school in Chicago. I moved to Alaska fifteen years ago and we haven't talked a lot over the years, but it was just like old times. He has a master's degree from the University of Chicago, and has always been employed but has been renting his entire adult life. He shared he's wanted to buy for years, but has always been intimidated by high prices and high interest rates. I am an investment oriented real estate licensee in Alaska and I talked to him about FHA loans and the possibility buying a 'two flat' (Chicago area duplex) to offset his monthly mortgage payment. It's maddening that he could've built so much equity in the past 15 years but he's been on the wrong end of the equation due to that anxiety about making the plunge. Sometimes its hardest to rationally present helpful information to those who you care about most deeply. Have you ever had a similar experience? Any tips?

Investment Info:

Single-family residence buy & hold investment.

Cash invested: $100,000

We built our first home with cash and borrowing from friends and family in Unalakleet, Alaska, some 300 miles from the nearest road - a village of 700 people. It's really hard to get a construction loan out there - there is no active real estate market. After the home was complete, we got an appraisal, took out a HELOC to reimburse friends and family, lived there five years and now we rent it out.

How did you finance this deal?

We had to get creative with limited options.

How did you add value to the deal?

Sweat equity.

What was the outcome?

Awesome cash flow for a SFH.

Lessons learned? Challenges?

There is no Lowes or Home Depot. All materials must be barged up in the summer from Seattle or Anchorage and everything else must be flown in. Getting contractors is incredibly expensive and difficult. So I had to learn a lot of construction skills from youtube, friends and family. The build took five years and a lot of blood sweat and tears. We scrounged foundation posts from old telephone poles that washed up on the beach.