How we live in a $300K+ home for only $600/month...

9 Replies

So I became obsessed with rental producing properties...

When we were looking for a long term home for our family in 2010, I stubbornly insisted that we focus on duplexes or single family homes with accessory apartments.

Single families with accessories was specifically what I wanted to target because of the lending programs that allow only 5% down as opposed to 20-25% down.

We found this home in Essex Junction.  It was in foreclosure and needed a little bit of work.  So my handy husband and I bought it up.  Made small improvements like paint, added a huge deck for the apartment over the garage and fixed the small issues that the city had with the property, like removing a strip of pavement that was 1' too wide.  (Picky I know, but we did what we had to in order to be compliant.)

We initially got a loan for 30 years, then refinanced it to a 20 year loan when the rates were really low in 2012.  Currently our PITI (principal, interest, taxes and insurance payment) totals just under $1,800/month.  Our apartment over the garage rents for $1,200.

So we 'are on the hook' for $600/month plus our own utilities...

And even better, we believe that if we ever wanted to rent out our side of the house, the property could cash flow positive about $1,000/month.

Lastly, because we got this at a great price and our improvements also increased the value, we were able to get a HELOC (home equity line of credit) against the home for $44K which was enough to fund our next multi family investment in Burlington.

Not so shabby.  How could a situation like this change your life?

Wow great job..... that is the way to go!! 

yes I would love to learn more about it if you have the time

That's great!  Chittenden County is stupidly expensive to live in. It's time to find yourself another one! ;-)

Thanks @Ceasar Blackman !

My first deal was actually the only one we lost money on...  I bought a condo for $165,000 on the river in Winooski.  Didn't cash flow positive when we ended up renting it out and sold it for less than I bought it for 7 years earlier...

I'd say the best deal was using FHA financing to purchase a duplex with 3.5% down. ROI on that duplex is amazing for so little money down!

Ashley

Sounds like your doing well with a small house hack! I am looking to do that when I move to a new area this fall. Don't forget to add maintenancel/etc into your cash flow numbers.

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