Lexington, KY House Hack by W. Sixth
Investment Info:
Small multi-family (2-4 units) buy & hold investment in Lexington.
Purchase price: $213,500
Cash invested: $42,700
This 1900's Duplex was the very first property I purchased when coming back into the area. It is located in what was a transitioning neighborhood that was seeing quite a bit of value climb and investment since the West Sixth Brewery moved in. At the time of purchase, the neighborhood had turned about 40%. The plan was to house hack it, living in one side while personally fixing up the other to rent out. It was in need of quite the facelift both on the interior and exterior.
What made you interested in investing in this type of deal?
Just moving back to the area, I was excited to get back into real estate investing.
How did you find this deal and how did you negotiate it?
This property was found on the MLS, and the offer was based on the properties potential and required renovations.
How did you finance this deal?
Purchasing it for $234,000 on a owner occupant loan (80% LTV) the 30 Year Ammortization I would eventually learn would really make this properties cashflow special. I immediately took out a HELOC from a local Credit Union up to 95% LTV to assist me with all of the renovation costs which turned out to be around $45K.
How did you add value to the deal?
Renovation of both Units (Kitchens, Bathrooms, Windows, etc) and a facelift to the exterior of the property.
What was the outcome?
An awesome cash flowing property in a appreciating and high demand area.
ARV on this property was appraised at $330,000 and rents are $1100/unit.
Equity gained - $71,500
ROI - 22.4%
Lessons learned? Challenges?
This was the property that helped me learn to outsource work. I ran myself ragged renovating the first unit by myself as I worked full time in another city at the same time. Once the first one was completed, I vowed never to put myself through that again and hired a contractor I found through another investor down the street. It was the single best decision I have made in my investing career. Their work was better and because they no longer had me as the bottle neck it was done much faster.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Real Estate Agent - Dave Alford (REMAX Elite)
Loan Officer - Lori Hawkins (Guardian Savings Bank)
