I am starting this post and would like to update it periodically. My wife and I purchased our first property back in July of this year. We are calling it Dirty Harry, because its on a street called Harrington and its dirty haha. The property is a duplex in Renton WA and we are house hacking it. Its a duplex from the 1940s and at the time of purchase was being rented for $900 each side. I am sharing a link to provide photos of what it looked like when we bought and would like to share photos of the progression of the property.
Prior to this we were living in an apartment and were paying $1540 per month + utilities and I got really tired of paying rent lol. This property represents a bike with training wheels in our eyes. Literally every improvement we make will be the first time ever doing it so its an exciting time! We are going to make plenty of mistakes, but thats how we learn and grow. Our goal is to make REI another revenue stream for us (hopefully a very large one) and this is our introduction to doing just that. The plan with this property is to rehab it over the next year and turn it into a cash flow positive asset.
The Numbers (while we live in it):
Purchased Price: $365k w/ 5% down payment on a conventional program
Rent: $900 (currently) but will increase to $1200 as of the new year
That offsets our mortgage to a little over $800, which is way better than the rent we were paying previously.
The Numbers (after both sides are rehabbed and rented out):
Rental income: $1550 each side
Net Operating Income: Rents-PITI = ($3100-$2018) = $1018 (I know this isn't cash flow btw)
Please comment, ask questions, critique my way of viewing the property, etc. I am always happy to talk about this stuff! And The advise of people that have gone before me is priceless to me so thanks in advance!
I also wanted to share some progress photos! The link is to dropbox with photos and a video update as well Click Here: Flooring Photo and Video
We found a flooring company to refinish the hardwoods that were under the carpet. That was a really big blessing! I don't have a great before/after photo because I never for great photos of the carpet before I ripped it out. But here is a preview image of the floors now.
@Pete Perez $900 to $1550 is a big jump. $3100 in rent for the purchase price doesn’t meet the 1% rule is my first observation without know anything else about the property. I just started house hacking and it’s really tempting to over inflate the fair market rent you’ll be able to actually get. Fortunately, a house hack makes learning mistakes less painful than a pure investment property.
Originally posted by @Sung Park :
Pete Perez $900 to $1550 is a big jump. $3100 in rent for the purchase price doesn’t meet the 1% rule is my first observation without know anything else about the property. I just started house hacking and it’s really tempting to over inflate the fair market rent you’ll be able to actually get. Fortunately, a house hack makes learning mistakes less painful than a pure investment property.
Yeah I am definitely aware it doesn't meet the 1% rule. I think $1550 is right where fair market rent is in this area for a 2bed 1bath rental with a backyard. The owner of the duplex up the street recently remodeled and rented his for $1750! Obviously finish and level of rehab factors into what you can charge, but from what I've seen online in this area its pretty competitive price.
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