Investment Info:
Townhouse buy & hold investment.
Purchase price: $305,000
Cash invested: $20,000
This was my very first property I bought after graduating college and within my first year working in DC. I treated it as a house hack and went as far as living on the couch and renting out every room. While the master was supposed to be a short-term living solution that I'd live in once the resident moved out, I wasn't complaining as I had healthy cash flow while I was living there. Now I rent the unit out to my father at a net 0 cash flow.
What made you interested in investing in this type of deal?
I had first heard about house hacking through bigger pockets and reading about the strategy in Craig Curelop's book on my commutes to work. I was interested in taking this step forward because while I was grateful, my father subsidized a lot of my living expenses in exchange for maintaining his place while he was frequently on travel. So I knew that real estate was the right step forward for me and house hacking seemed like the perfect way to start.
How did you find this deal and how did you negotiate it?
I found this deal through my wonderful realtor, Adrienne Green, and she did a great job advising me on what would be a reasonable offer and what to request as a buyer. This property was on the market for about a month and we were able to negotiate it down to 10k under asking, which I can't believe looking back considering how neighboring townhomes can't stay on the market for longer than a week and go for over asking.
How did you finance this deal?
I went with conventional finance while taking advantage of a first-time homebuyer program that my lender, Will Hollister (recommended to me by Adrienne), found for me. I saved up my downpayment while working a side hustle on weekends to speed up the process.
How did you add value to the deal?
I furnished all common areas of the home to prepare for my future residents, who turned out to be brothers of my fraternity that graduated before me. Nothing else major was added and altered except for some aesthetic changes.
What was the outcome?
At the moment, the place now houses my father. This transition took place as I was preparing to buy my next house hack 18 months after I originally closed. Previously, our two-bedroom, two-bathroom condo was leased to him at essentially the same cost I'm passing to him. My father was a great tenant and his landlord reciprocated by rarely raising rent and not pushing the issue that I was living there without my name on the lease.
Lessons learned? Challenges?
My ceiling flooded twice! First due to me not trusting my gut and using the washing machine after it mysteriously filled itself with water overnight, and the second time a year later due to a polybutylene pipe bursting, which would have been an easy fix had I known that this was something to look out for a while the ceiling from the first water incident was open. While these hardships weren't ideal, I gained some important life experience and intuition.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Realtor: Adrienne Green
Lender: Will Hollister
