Foreclosure --> Renovate--> House Hack--> Airbnb--> Repeat!!

[Jimmy Vasquez]

Investment Info:

Single-family residence wholesale investment.

Purchase price: $139,000
Cash invested: $25,000
Sale price: $290,000

Bought as a foreclosure without a real estate agent. House needed cosmetic work. Windows were broken out, new flooring was needed in the basement, yard was a mess. Perfect duplex situation with separate entrance for lower level.

I fixed up the basement and house hacked. My wife and I lived in one room and we rented out the other three rooms. Eventually we just rented out the basement and then turned the whole thing into a rental. Owner occupied interest rate.

We made it through the real estate downturn and always had positive cash flow. This rental had awesome cash flow and great equity over time also.

We eventually sold this house and purchased two investment properties with double the equity.

What made you interested in investing in this type of deal?

I was interested in under valued, foreclosure properties

How did you find this deal and how did you negotiate it?

Found this deal on the MLS. Negotiated with the seller's agent. Deal took a while to close (5 months) but it was worth it.

How did you finance this deal?

Financed with traditional financing, owner-occupied rate. I put $100 down on this house.

How did you add value to the deal?

Sweat, sweat, sweat. There was cosmetic work to do inside and out.

What was the outcome?

House hacking paid the mortgage at first. Then it cash flowed great as a traditional rental. Decided to turn into a full time airbnb which increased cashflow further. Ultimately sold this house and bought two more.

Lessons learned? Challenges?

Many lessons learned here:

1) Get some training from experienced renovation people before attempting projects like window replacement.
2) Vet house hacking tenants with background check and believe what you read on the background check.
3) The slope of the lot matters! Flooding is a thing ;)