House Hack Success!
Investment Info:
Single-family residence buy & hold investment in Prescott.
Purchase price: $169,000
Cash invested: $34,000
A 3/2 I bought to house hack. When I bought the property, I put 4 other friends in it ( up to 5 at one point and I shared a room so I could charge more for the master bedroom). They paid the mortgage for me and I cash flowed $150 per month, slowly fixing things as they came up. Living in it and being a landlord and friend was a hard balance, but it was worth it. I was able to upgrade the home a lot before I got married, because of the rent I paid myself instead of someone else.
What made you interested in investing in this type of deal?
I was tired of paying rent to someone else, I had the money to do it and I didn't want to waste it on something that would only go down in value. There was a lot of potential in this home and it was a great deal.
How did you find this deal and how did you negotiate it?
I had a friend who is a real estate agent who looked for me and sent listings my way. he knew what I was trying to do (house hack but I didn't know it was called that at the time). It was listed at $180,000 but because the home inspection showed some things that needed to be done and I knew they wanted to sell quickly (since the previous owner passed away and this was to settle the estate), I got them down to $169,000.
How did you finance this deal?
Since it was going to be my primary residence I just did an FHA loan. Nothing fancy
How did you add value to the deal?
My real estate agent friend sent me the listings and showed me the properties, but I scoured Zillow and the MLS (someone gave me access at that point since I did not have it) to research other recently sold properties to facilitate a deal.
Lessons learned? Challenges?
As with any older house, there were some things that needed work, like it had no A/C and only radiant heat (built in 1978), so dealing with that was tough while HVAC was installed, but learning to be a landlord was a great, but tough lesson. Getting rent, fixing things that were broken and listening to the advice of others helped me greatly.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, I worked with Luther Kraxberger who is a friend of mine. Very sharp, reliable guy and I'm thankful for his help to find this deal!