All Forum Posts by: Vincent Egan

Investment Info:

Single-family residence buy & hold investment.

Bought this single family home with the purpose of house hacking. Rehabbed the property to add another bathroom and bedroom. I now have 2 roommates who pay down the mortgage.

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

I was interested in house hacking a small single family home as it felt like one of my only options out of college. I knew I could easily find tenants/roommates as the area is popular for young adults.

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

I found the deal through a family friend who is a real estate agent. We didn't negotiate the deal. The property was listed on the MLS. We put in a cash offer at asking price the morning it was listed and the offer was accepted right away. We knew the property had an absentee owner who would be wanting/willing to close fast so it made sense to provide them with their perfect solution.

How did you finance this deal?

To be competitive, I was able to generate a cash offer with the help of my family. Once the deal was complete, I used delayed financing to pay back the first 80% percent and created a second loan with my family to pay back the residual.

How did you add value to the deal?

I added value to the deal by doing a "live-in" renovation. I was able to renovate the first floor in a few months to got the first roommate in. I then spent the next year renovating to add a second bedroom and bathroom. This now allowed me to have 2 roommates to cover the mortgage.

What was the outcome?

I still own the house currently and still make small renovations here and there. I plan to keep this house and use it as either a rental home or continue to house hack it. It all depends if I can find another house to do something similar with in the future.

Lessons learned? Challenges?

I have heard it 100 times and still fell foriit but I definitely put too much money into the original renovation. I got more attached to the home as I lived there and did more than needed to make it a rental. I am happy that I did the "extras" because I get to enjoy them now but the ROI is not there. One challenge I found is balancing the work/life balance in the house. I can't enjoy living in the house sometimes because all I see are projects. It can be overwhelming.

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

One agent who i can highly recommend is Nancy Tochman based in Canton, MI. She was my agent when purchasing the home and helped explain everything to me along the way. Genuine, honest and had my best intentions the whole way through!

Hello,

It's been a while since I've posted and this may be a dumb question but I wanted some clarity on this topic.

I know a cash out refinance is a way to pull out built up equity in your home and I know that delayed financing is essentially the same thing but immediately after purchasing a house with cash but this is where I get confused.

Is delayed financing just when you perform a cash out refinance soon after paying cash for a home?

I've read some articles and forum posts and am still a little confused. Any information, stories, or links would be greatly appreciated.

Thanks!

@Drew Sygit Yeah, I’ve definitely heard worse things myself too. And the way it was told to me it didn’t seem like it had a negative impact but my relative moved out of the area so I don’t think they know either. All I know is the area today is not the greatest.

I am still new to the world of real estate investing and one of the things I'm doing to make myself get more involved is talk about it. Well this past weekend I was talking with one of my family members about real estate and they told me an interesting story that I thought was worthy of sharing.

My family member told me they bought their first home on the border of Detroit and Dearborn back in the early 90's for $18,000 and shared it with a few of their friends. After a few years and lots of work being put into the house, the house was valued at $46,000 when they started trying to sell it. However, my family member saw that the neighborhood was starting to head in the wrong direction when they saw that some windows were being boarded up down the road and people were letting their lawn and shrubs wither. My relative decided to take some action and help promote the block to help sell their own property. They created a page long document labeled "Streetname Notice" and proceeded to write that Ford was looking to expand into the area and that in the near future homes were going to be re-evaluated for future employee housing (The way it was described to me didn't make much sense). This was not true but my relative was trying to get their neighbors to care more about the appearance of their home so theirs would be easier to sell. Sure enough, soon after they put a notice in everyone's mailbox, my relative saw some steps taken by some of the neighbors to clean up their lawn and spruce up their homes. My family member ended up selling their house at the value they were hoping and they accredit it to that notice.

Personally, I am stuck on what to think of this story. My family member also told me he/she would do their part in helping the image of the neighborhood as well. They told me they would help mow others lawns and plant shrubs and flowers to liven up the block before they planned on selling it. I say this as some sort of defense for my relative because I think they had a real interest in the upkeep of the neighborhood and not just money. I'm curious on other personal thoughts and opinions about this story.

Yikes @Jordan Theisen That doesn't sound like the most pleasant experience but hopefully it pays off. I will definitely be looking out for the some of that stuff to avoid in the future. Thanks!

@Anson Young, I'm glad you say that because that's right where I'm at. I hope I find myself right along those pilots one day soon!

Thanks for the feedback and story @Erik W.! I have already started talking to my dad about co-signing and I have been building a reserve of money by continuously working while in school so I hope i'm off to a good start. But parents co-signing and the added security definitely sounds like a good idea to me, I'll keep those both in mind moving forward.

I just hope wherever I end up doing this I don't run into neighbors like you had. That wouldn't be the "Welcome Home" i would want to be starting with hahaha

Thanks @Kathy Henley! I will add that book to my list and I've been doing both those things and i plan to keep doing them!

The past couple months some friends and I have been trying to get a start in real estate investing. As we are still in college we thought that house hacking could be a good way to get started. I'm posting this to get some motivation and stories from any members who have tried this out or currently do it. Any tips, advice, insight, or experience that you have to share would be helpful to me and anyone else who finds their way to this post!

@Abel Curiel

I'll definitely have him do that and I'll be sending you a message soon. Thanks!