Meet Tim: How One Newbie Investor House Hacked a Duplex With No Prior Experience

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What would life be like with no rent? No mortgage payment?

Pretty good, as it turns out.

Nowadays, 11 million Americans spend half their income on rent, and that doesn’t include the millions of homeowners similarly overstretched.

But for anyone looking to find a different path, house hacking comes with plenty of perks. For this story, I tracked down a bona fide house hacker and pried until he agreed to spill the proverbial beans on exactly how he did it.

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Meet Tim

Tim Puffer is a 27-year-old insurance underwriter who lives in East Lansing, Michigan. He woke up one day sick and tired of paying for housing.

So he did something about it.

Tim had no prior real estate investing experience—and no experience renovating homes, either. But the more he researched house hacking, the more confident he became that he could do it.

He started looking for small multi-unit properties in middle-class neighborhoods around town. Eventually, he settled on Forest View.

The Neighborhood

Forest View is a quiet neighborhood near Michigan State University. It’s a neighborhood of classic suburban cul-de-sacs, with minimal traffic. Kids play outside during the day.

The area consists of $90,000-150,000 single family homes, well-maintained condos, and a clean, middle-income apartment community with about 100 units.

Tim goes on to explain: “We are about a two-minute drive from the Michigan State University campus and the campus golf courses. We actually had a few MSU professors look at the unit to rent and MSU basketball’s new head trainer! They didn’t rent from us, but I knew I had a solid location because of that.”

Related: The Tax Implications You MUST Understand Before House Hacking

The Property

Tim bought a bi-level duplex, with each unit boasting 3 bedrooms, 1.5 bathrooms, about 1,400 square feet of living space, and a one-car garage.

The lower level on both sides has a walkout to a small wooden patio, which overlooks about a half-acre total and is almost completely enclosed by trees from the neighbors.

So, how did Tim find this gem of a property?

For anyone who thinks direct mail is dead, hold your horses—Tim sent a good ol’ fashioned handwritten letter to the owner. Turns out the owner was ready to sell and called him back.

The Numbers: Acquisition & Updates

Tim bought his duplex for $119,500, financed through an FHA loan with their skinny 3.5% down payment.

The seller also contributed $4,500 towards closing costs, $1,000 towards a new hot water tank, plus money to cover an extra month’s rent for one of the tenants. (“The other unit’s tenant was rented to his ex-step son.”) Tim gave him notice to vacate, and he stayed the extra month prepaid by the seller.

One of the units needed some work. The prior tenants of six years had smoked and were “not clean people.”

Total cost of renovations: $17,000 for updated flooring, windows, deck, cabinets, paint, central air, hot water tank, countertops, and appliances.

If that sounds like a lot of work and not a lot money, well, Tim put in plenty of sweat equity himself. “Bear in mind that I completed most of the work myself, save the A/C, hot water, windows, and deck. I had not previously done any flooring, good painting, trim work in my life. I’m a [email protected]*n good painter now!”

Oh, and the other cost in that $17,000? Tools. Tim didn’t have any since he’d never done this kind of work before.

How did Tim pay for all this?

“Repair costs were financed via cash, credit card, and re-financing vehicles to pull cash out. I have since gotten a HELOC on the building and paid off that vehicle and the credit cards. The building appraised for $162,500 after repairs.”


The Numbers: Monthly Cashflow

Tim’s mortgage payment (principal, interest, taxes and insurance) is $951. That includes an FHA mortgage insurance premium of $81/month (which, unfortunately for Tim, will never go away).

But his interest rate is a lean 3.75%; not too shabby!

And the rent? “The resident pays $1,140—pet rent is part of this. I provide lawn care and trash/recycling. They pay all their own utilities.”

That leaves Tim an extra $189/month to cover maintenance, repairs, and the odd vacancy, all before he ever has to pay a dime towards his own housing.

Has Anything Gone Wrong, or Is This a Fairy Tale?

“The cabinets and countertops didn’t go as planned. We purchased the countertops before the cabinets, and the cabinets ended up being slightly smaller. We had to purchase new countertop and eat the cost.”

Fair enough. After all, Tim is not a contractor and has almost no experience in home repair.

The story turns grimmer when it came to permits and inspectors. “I didn’t pull a permit for the deck when we built it. During my city rental inspection, they said I need to pull one. It’s taken me about a month to find a contractor willing to put the permit in his name, do the site plan drawings, and take on anything needed to appease the rental inspectors. I’m hoping to finally have this wrapped up in the next few weeks.”

City permit offices are a nightmare at the best of times. When you miss a step, and do work without a permit, prepare for the wrath of local bureaucracies to rain legal hassles, paperwork, fines, fire and brimstone down upon thee.

What about trouble with the renter?

Tim says he’s been lucky so far. “No major issues. Just small things—I like to play music when I get home from work while I’m doing things, and they have an 18-month old. I wait until they are up from their nap at around 5:15.

“I don’t play it ridiculously loud, but I pay attention to that for them.”

Sounds pretty hunky dory to me.

Tim’s Advice

I asked Tim what advice he had for other people looking to model his success with house-hacking a duplex.

“Know your numbers! Even though I underwrote for $950 rent and am getting more than that, there are still costs that I didn’t factor in at that time (over a year ago) that I have had to do, such as gutters and insulation.

“Also don’t be afraid of living next door to your residents. It’s really not a big hassle at all. Ideally you should try to choose a resident with whom you can be friendly, because you will see them quite often and have quite a few conversations outside of landlord/business talk. You may even share a bonfire or two together!

“That being said, if you have to enforce your lease’s rules—do so! You are running a business!”

Related: A New Way to Look at the Concept of “House Hacking”

Is House Hacking for You?

Not having a mortgage payment sure is nice. You could put your entire housing payment towards your investments and creating passive income!

Still, it comes with its own price tags. Tim did much of the renovation work himself, learning as he went along. He spent his weekends working while his friends were out having fun.

And city permit offices and inspectors? Bureaucratic red tape and threats of fines over a small wooden patio? Pure misery and endless frustration.

There’s also the close proximity to your tenants. You have both a business relationship as landlord and tenant and a personal relationship as neighbors. It can work well, like in Tim’s case, but it means choosing renters with extra care.

I asked Tim: Any final words of advice?

“Don’t talk about it; be about it! You can only talk about investing in real estate for so long before you need to take action!”


[Editor’s Note: We are republishing this article to help out our newer readers.]

Ever pursued house-hacking? Any experiences to share? Horror stories?

You know we love a good story around here…

About Author

G. Brian Davis

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their living expenses. Through his company at, he offers free rental tools such as a rental income calculator, free landlord software (including a free online rental application and tenant screening), and free masterclasses on rental investing and passive income. He’s been obsessed with early retirement since the early 2000s (before it was “a thing”). Besides owning dozens of properties over nearly two decades, Brian has written as a real estate and personal finance expert for publishers including Money Crashers, RETipster, Think Save Retire, 1500 Days, Lending Home, Coach Carson, and countless others.


  1. Travis Zappia

    Really appreciate this article!

    I started to get the Real Estate bug at the end of last year and have been reading and looking for properties to invest in for Buy and Hold. In the meantime until I find a property I have been house hacking the two additional bedrooms and have been loving the additional income that I am going to help to potentially fund multiple investment properties.

    I love the thought of purchasing a duplex in August once I have lived in this home for a year.

  2. Jenn N.

    That’s awesome. We are house hacking as well. We found a 2200 square foot duplex (each side) that is perfect for our family of six. We are on our second round of tenants and our new ones are amazing. Our kids are now best friends and our families hang out every day. We actually did have a bonfire or rather sat around the fire pit together last week. ?

    • G. Brian Davis

      That’s fantastic Jenn! Congratulations. You’ve managed to enrich your life both financially and personally, which is ultimately what personal finance and rental investing is all about. How did you find the property, any tips?

      • Jenn N.

        I actually found the property on Zillow of all places. I was pregnant and had insomnia at 2 am it popped up as new while I was scanning. I was familiar with the area and knew it was priced below market so we offered over the asking price and sent a letter (complete with cute pictures) explaining how it would help our family out financially. Three other offers came in that day but they accepted ours. My advice would be to move fast if you know it’s good and I really think letters can help. We bought a fourplex the same way. I couldn’t say we were going to live in itbut I explained how it was an investment into the future of my four boys. 🙂

        • G. Brian Davis

          Great illustration of the power of personal touch in real estate investing. Love the letter idea, and the execution.
          Thanks for sharing Jenn!

  3. Eddie Lehwald

    Great stuff Brian! For a newbie I don’t think it gets any better than duplexes. Speaking from my own experience….my girlfriend and I are currently house hacking a duplex that we bought in September 2015. It turned out to need a LOT more worked than anticipated-what we thought was going to be a quick “new paint, new carpet, ready to go” turned into gutting the first floor and starting from scratch-while living there. Hoo boy.

    Because we were so completely off on the remodeling costs we also ran out of money so at the darkest point we were stretched razor thin, doing almost all of the work ourselves, and generally wondering if this was the worst decision that we had ever made. If it was a single family house we would have been in serious trouble, but we had some inherited tenants on the other side-they were kind of terrible but the money coming in from them is what saved us.

    It was a brutal, “school of hard knocks”-type of an education but we stayed positive (for the most part) and got through it. We’ve since booted out the inherited tenants and moved onto their side, and the other side is completely renovated/updated and rented to great tenants (with whom we do, in fact, share a fire pit), the mortgage is covered and we’re finally seeing our savings accounts grow again in a big big way.

    I’ve since discovered BP and found a lot of fantastic info here; that, coupled with the hard-won knowledge (and money!) from this first house hack is setting us up to buy another property this year.

    • G. Brian Davis

      Wow, what a ride Eddie. I’m sorry it was such a painful experience, but it sounds like you came through it intact and better off for it. I’ve had a few experiences like that myself.
      The next one will almost certainly be easier (and more profitable, faster).
      Best of luck with your next property this year, keep us posted!

    • Tim Puffer

      Going through that tough time is invaluable. Your next property you’ll be able to better estimate the costs and issues going in. The fact that you took action, got started, and pushed through some tough points is what will make you successful!

  4. Cody L.

    ““Don’t talk about it; be about it! You can only talk about investing in real estate for so long before you need to take action!””

    Loved that quote. I get asked all the time “How do you get started?” I reply “You get started”. Most people will become forum junkies and read read read. At some point you need to take the plunge.

    Congrats to this guy. You’ll be at 1000 units before you knew it as you have the right attitude and mindset

  5. Amy Xu

    I’m in the same exact boat as Tim. I was able to purchase my first duplex with FHA 3.5% down, which I am going to house hack. The previous tenants were also not the cleanest and smoked so I need to do some repairs and upgrades to make the place more rent ready.
    Brian- can you advise how Tim was able to pull off the HELOC? I will be borrowing money to renovate the duplex but want to pay off my borrowed money as soon as possible. Any advice would be appreciated! The selling price was 175K but the city assessment for the property is 241K.

    • G. Brian Davis

      Hi Amy, and congratulations on the duplex purchase! You’ll just need to call around to lenders to get a sense for HELOC pricing and terms in your area, and how they’ll work for your property. HELOCs are great because of their flexibility, and while I’ve never used one myself, the investors I’ve worked with who have say that they’re easier than mortgages to get funded.

    • G. Brian Davis

      Thanks Jasmine, and I’m excited to hear that your next step is moving forward with your first investment! Please don’t hesitate to reach out over PM at any time if there’s anything I can do to help.

  6. Anna M.

    “Don’t talk about it; be about it! You can only talk about investing in real estate for so long before you need to take action!”…. I too love that quote. Your journey is similar to the one I took for my very first property. I still live in that property while continuing to acquire more properties. The property I house hack is a duplex with an ADU on one side. I rent the 2 upper units and live in the ADU basement that has its own separate entrance, 2 bedrooms, egress, packing, bath, kitchen, washer/dryer. Entirely separate. Living in the basement has it’s challenges, but at the same time, I would not give this up. It is a smart decision in that it allows me to gather more rent for the upper units both of which come with one-car garage, the basement (which I live in) does not but has ample 3-car packing on property. Rest of the units have 2 car packing on property as well as an additional up to 2-cars packing on each side on-street packing. Very cool property with mature trees and large fenced in backyard. I truly love this property and the idea of house hacking, next best thing to sliced bread!

  7. John Glaze

    The article is fantastic as a real world househacking example and very inspirational. Thank you for that but the comments also add so much to inspire and inform for those of us reading everything we can get our hands on while trying to find our first or next investment deal.
    Thank you everyone you are all very helpful as I try to find a multi family deal.

  8. Great article.

    I have never heard of sending out direct mail with the intent to then buy with an FHA.

    What would be the benefits to the seller, wouldn’t they be better to put it on the market and try to get a higher price or even a cash offer which is an easier close?


    • Anthony Wick

      We just did this to buy a duplex! Seller stated the “investment community” was offering, but their prices were low. And we are moving into the duplex, so our offer wasn’t a straight up “investment” by a corporation. As I always like to say; “it’s free to look, listen, and offer”. No harm in giving it a try. Also, the seller avoids realtor fees on their side, and the time and effort. The buyer is literally knocking on their door. Also, we were prequalified for a mortgage, so the seller knew we were serious.

    • G. Brian Davis

      Thanks James! As for the benefit to the seller, there are two: convenience and not having to pay a Realtor’s commission. Without having to do a thing, the seller can just show up to settlement 30 days later and walk away with a check.

  9. Anthony Wick

    We really wanted a buy a duplex in our area. Exactly zero duplexes for sale. Everybody else must think like us. However, my realtor wanted to earn her money. Direct mailing it is! One person responded. And he was willing to talk. We now close on the duplex in January 2018. No, the other side will not pay for the entire mortgage. However, it will pay for 70% of PITI (plus PMI for FHA). And that’s a whole lot cheaper than the rent I’m currently paying. And after a year (FHA requirements), we will look for a SFH to buy and move in to, and rent out both sides of the duplex, netting about $500 a month above said mortgage (before repairs/expenses/vacancies). And the plan is to refinance that FHA mortgage when possible, and free up the FHA option to wash, rinse, and repeat on another duplex, which would mean renting out that SFH if we find a second duplex. It’s a 3-5 year plan, but step 1 is almost complete.

  10. Cayla Farley

    So what would be his next steps?? We are in this situation as well. Low down payment of 5% because we are owner occupying. But now we want to refinance to a conventional loan and buy another property using FHA but can’t, because our LTV is 95% and a conventional loans LTV is 75%, so where does the extra 20% needed come from? Just save up cash flow? On a duplex that would take years….so what’s next….?

    • G. Brian Davis

      Hi Cayla, if you’re moving into a new multifamily, you can always get a conventional owner-occupied loan for the new property and leave your FHA loan in place for now on the old duplex. Not an ideal long-term solution but it could work for now. If you want to grow your portfolio, doing it by moving into each new property is a pretty slow strategy though.

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