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!!
Any chance you want to learn more about it?
yes I would love to learn more about it if you have the time
Let me PM you! : )
That's great! Chittenden County is stupidly expensive to live in. It's time to find yourself another one! ;-)
@Ashley Wishinski thats how it should be done!! Congrats.. was this your first deal ?
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!
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.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing