Built legal 2bd, 2 bath apartment in basement
Investment Info:
Single-family residence buy & hold investment.
We have done a house-hack. We bought a single family house where we created a completely separate apartment, otherwise known as an ADU in Portland (auxiliary dwelling unit) in the basement. We bought this fixer-upper two years ago. We spent the first 6 months working on the first and second floors where we live - just enough to make it livable. Then spent the next year and half creating the apartment. Looking to create more passive income!
How did you find this deal and how did you negotiate it?
We worked with a local realtor who knows Portland well. This was important as we were new to the area. He steered us to a good neighborhood in an up and coming area of town. The sellers needed a certain dollar amount to pay off the bank. We agreed and gave $10K over their bottom line with the stipulation that we get that money at closing to help with improvements.
How did you finance this deal?
VA loan - 0% down
How did you add value to the deal?
Lots of sweat equity! My husband is a handy guy :-)
What was the outcome?
We are finalizing a refinance. It's for 200k over what we paid two years ago. (Combination of adding value through the rental unit and improving the overall property, along with prices increasing in our area).
We will take 100k to pay off personal debt acquired creating the apartment and leaving the other $100k in the house for now.
