Updated about 6 years ago on . Most recent reply
House-Hacking our way to Cash flow!
Investment Info:
Small multi-family (2-4 units) private money loan investment.
Purchase price: $300,000
Cash invested: $25,000
We are currently house-hacking a 4 unit Colonial. For the other three units, all utilities included are in the rent and many amenities including laundry room, exercise room and in-ground pool as well as extra storage above the two car garage. We Airbnb our unit during the winter so that we can travel.
What made you interested in investing in this type of deal?
We didn't have to put any money down, nor pay for our own closing costs
How did you find this deal and how did you negotiate it?
Our landlord approached us, and I brokered the deal from start to finish. This is how I got started in real estate, the following year I got my license in VT and NH and haven't looked back!
How did you finance this deal?
Seller Financing - $0 down, no closing costs $15,000 seller concession at closing to cover repair costs for plumbing, electric and heating upgrades and for replacing the pool deck. Negotiated a 20 year note at 5% fixed rate
How did you add value to the deal?
I created the terms, and I negotiated the closing costs and seller concession after doing home inspections but also demonstrating how I saved him 6% by not going through a realtor. I learned everything I could about real estate in a super short amount of time, we both left the deal feeling like we had won
What was the outcome?
3 years in we are breaking even on all 3 units, but we are creating positive cash flow by Airbnbing our apartment when we travel or when we stay at our condo that we inherited but are also currently renovating. We will be putting that unit on Airbnb this winter which should finance our travels if not create even more positive cash flow
Lessons learned? Challenges?
Lesson I learned immediately after the closing - when we hired our first contractor to do the work of replacing the pool deck , I had no idea how to vet these guys and I had no idea how to read a quote or invoice. We ended up getting pretty screwed, and $8,000 we had a destroyed yard and no deck. My husband went to YouTube and learned how to lay pavers and it took the entire summer but we finished it and it looks amazing. Big lesson learned
