With only $1500 in my bank account, I made a decision to move to Las Vegas from my small town in Connecticut in July 2016. At this time, I knew the potential of investing in real estate but was unsure of exactly how to begin or what to purchase. After a month of searching and not being completely ready to buy, I decided to move into a 6-bed house where I rented a room for $400/month.

After living in the house for a couple of months, I couldn't help but calculate how much my landlord was making every month charging everyone $400-600 per month. I was disappointed that most of the multifamilies I saw on Zillow and Redfin were in rougher neighborhoods, so I knew I had to replicate this bedroom rental model. 

Over the following 9 months, I was able to save about $10k from my W-2 job which allowed me to get pre-approved for $180k. Wanting to optimize my house hack, I had Zillow, Realtor.com, MLS, and Craigslist auto searches for 4+ bedroom houses under 225k. After 9 rejections....the 10th offer was the magic one. I found it on Zillow after a price drop from $189,900 to $185,000 for a 7 Bed/5 Bath, 2426 sqft. house. I offered 170k, and they countered at 175k with 5k in closing costs to the buyer. The deal was done. It appraised for 186k during closing.

I purchased this property with a conventional loan with about 10k down (my entire savings) at 4.35% interest rate. My monthly PITI was $996/month.

Even though the house passed for conventional financing, it was barely liveable, extremely outdated, and needed to be brought back to life. With the property being located on Eastern Ave near the Las Vegas Airport, the zoning laws allow for residential or commercial use.

Now I don't recommend any of this but I was essentially relying on my W-2 income of $1200/week to cover the labor costs for the contractors and putting materials on my credit card. I ripped up the old laminate floors, a layer of carpet under that throughout the house, and linoleum flooring under that as well. I put down luxury vinyl planking throughout the house and 4-inch base, except for the kitchen and the converted garage that already had tile. I remodeled 3 of the 5 bathrooms but waited to do the master bathroom until I had enough money (where I was living). I also had the kitchen remodeled by one of my contractor referrals 8-9 months in, replaced the AC after a year and reshingled the roof 2 months before selling. All in rehab costs for the house were $31k.

Now to the good stuff.....6 bedrooms were rented for the following ($650 garage, $450 small bedroom, $600 large bedroom, $500 bedroom w/private bath, $525 large bedroom, $450 small bedroom)

Note: All prices include $50 fixed cost for utilities. Subtract my monthly expenses + mortgage = $1750/month cash flow. Factoring in vacancies, the total generated cash flow was $35,450 over the course of those 21 months (I also moved out of the master for 4 months, renting the room out for $500).

As of March 1st, 2019 I have signed a Lease Purchase Agreement with another local house hacker looking to do the same thing for $300,000 purchase price (60k down, the remaining 80k at time of refinancing). So that leaves me $140k in equity at the time of purchase, $35,450 rental cash flow, less the $31k in renovations = $144,450 Profit. And it does get better.

Since that house was my primary residence and will be recorded after 2 years of ownership, that 144k will not get hit with capital gains. Since I am carrying the note until the new owner is able to refinance, I am receiving an additional $500 per month in surplus cash flow. At the expected time of refinancing, my total profit for the property will surpass $150,000.

I see this house hack as a monumental start to my Real Estate career. 

Because all of my living expenses were covered, I was able to quit my job and focus on real estate full-time. Even if times were rough, the income from the property allowed me to focus on wholesaling and get into some fix and flips.

I am no expert but I think if you are scared....just DO it. Take action. You will make progress towards your goals.

I will be using these funds to expand my rental portfolio in Columbus, Ohio and some of the funds have already helped me get 3 more duplexes under contract to purchase. This post was made to inspire and I hope it helps someone else get started on their journey.

-GC3