Meet Tim: How One Newbie Investor House Hacked a Duplex With No Prior Experience

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What would life be like with no rent? No mortgage payment?

Pretty good, as it turns out.

Nowadays, 11 million Americans spend half their income on rent, and that doesn’t include the millions of homeowners similarly overstretched.

But for anyone looking to find a different path, house hacking comes with plenty of perks. For this story, I tracked down a bona fide house hacker and pried until he agreed to spill the proverbial beans on exactly how he did it.

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Meet Tim

Tim Puffer is a 27-year-old insurance underwriter who lives in East Lansing, Michigan. He woke up one day sick and tired of paying for housing.

So he did something about it.

Tim had no prior real estate investing experience—and no experience renovating homes, either. But the more he researched house hacking, the more confident he became that he could do it.

He started looking for small multi-unit properties in middle-class neighborhoods around town. Eventually, he settled on Forest View.

The Neighborhood

Forest View is a quiet neighborhood near Michigan State University. It’s a neighborhood of classic suburban cul-de-sacs, with minimal traffic. Kids play outside during the day.

The area consists of $90,000-150,000 single family homes, well-maintained condos, and a clean, middle-income apartment community with about 100 units.

Tim goes on to explain: “We are about a two-minute drive from the Michigan State University campus and the campus golf courses. We actually had a few MSU professors look at the unit to rent and MSU basketball’s new head trainer! They didn’t rent from us, but I knew I had a solid location because of that.”

Related: The Tax Implications You MUST Understand Before House Hacking

The Property

Tim bought a bi-level duplex, with each unit boasting 3 bedrooms, 1.5 bathrooms, about 1,400 square feet of living space, and a one-car garage.

The lower level on both sides has a walkout to a small wooden patio, which overlooks about a half-acre total and is almost completely enclosed by trees from the neighbors.

So, how did Tim find this gem of a property?

For anyone who thinks direct mail is dead, hold your horses—Tim sent a good ol’ fashioned handwritten letter to the owner. Turns out the owner was ready to sell and called him back.

The Numbers: Acquisition & Updates

Tim bought his duplex for $119,500, financed through an FHA loan with their skinny 3.5% down payment.

The seller also contributed $4,500 towards closing costs, $1,000 towards a new hot water tank, plus money to cover an extra month’s rent for one of the tenants. (“The other unit’s tenant was rented to his ex-step son.”) Tim gave him notice to vacate, and he stayed the extra month prepaid by the seller.

One of the units needed some work. The prior tenants of six years had smoked and were “not clean people.”

Total cost of renovations: $17,000 for updated flooring, windows, deck, cabinets, paint, central air, hot water tank, countertops, and appliances.

If that sounds like a lot of work and not a lot money, well, Tim put in plenty of sweat equity himself. “Bear in mind that I completed most of the work myself, save the A/C, hot water, windows, and deck. I had not previously done any flooring, good painting, trim work in my life. I’m a [email protected]*n good painter now!”

Oh, and the other cost in that $17,000? Tools. Tim didn’t have any since he’d never done this kind of work before.

How did Tim pay for all this?

“Repair costs were financed via cash, credit card, and re-financing vehicles to pull cash out. I have since gotten a HELOC on the building and paid off that vehicle and the credit cards. The building appraised for $162,500 after repairs.”


The Numbers: Monthly Cashflow

Tim’s mortgage payment (principal, interest, taxes and insurance) is $951. That includes an FHA mortgage insurance premium of $81/month (which, unfortunately for Tim, will never go away).

But his interest rate is a lean 3.75%; not too shabby!

And the rent? “The resident pays $1,140—pet rent is part of this. I provide lawn care and trash/recycling. They pay all their own utilities.”

That leaves Tim an extra $189/month to cover maintenance, repairs, and the odd vacancy, all before he ever has to pay a dime towards his own housing.

Has Anything Gone Wrong, or Is This a Fairy Tale?

“The cabinets and countertops didn’t go as planned. We purchased the countertops before the cabinets, and the cabinets ended up being slightly smaller. We had to purchase new countertop and eat the cost.”

Fair enough. After all, Tim is not a contractor and has almost no experience in home repair.

The story turns grimmer when it came to permits and inspectors. “I didn’t pull a permit for the deck when we built it. During my city rental inspection, they said I need to pull one. It’s taken me about a month to find a contractor willing to put the permit in his name, do the site plan drawings, and take on anything needed to appease the rental inspectors. I’m hoping to finally have this wrapped up in the next few weeks.”

City permit offices are a nightmare at the best of times. When you miss a step, and do work without a permit, prepare for the wrath of local bureaucracies to rain legal hassles, paperwork, fines, fire and brimstone down upon thee.

What about trouble with the renter?

Tim says he’s been lucky so far. “No major issues. Just small things—I like to play music when I get home from work while I’m doing things, and they have an 18-month old. I wait until they are up from their nap at around 5:15.

“I don’t play it ridiculously loud, but I pay attention to that for them.”

Sounds pretty hunky dory to me.

Tim’s Advice

I asked Tim what advice he had for other people looking to model his success with house-hacking a duplex.

“Know your numbers! Even though I underwrote for $950 rent and am getting more than that, there are still costs that I didn’t factor in at that time (over a year ago) that I have had to do, such as gutters and insulation.

“Also don’t be afraid of living next door to your residents. It’s really not a big hassle at all. Ideally you should try to choose a resident with whom you can be friendly, because you will see them quite often and have quite a few conversations outside of landlord/business talk. You may even share a bonfire or two together!

“That being said, if you have to enforce your lease’s rules—do so! You are running a business!”

Related: A New Way to Look at the Concept of “House Hacking”

Is House Hacking for You?

Not having a mortgage payment sure is nice. You could put your entire housing payment towards your investments and creating passive income!

Still, it comes with its own price tags. Tim did much of the renovation work himself, learning as he went along. He spent his weekends working while his friends were out having fun.

And city permit offices and inspectors? Bureaucratic red tape and threats of fines over a small wooden patio? Pure misery and endless frustration.

There’s also the close proximity to your tenants. You have both a business relationship as landlord and tenant and a personal relationship as neighbors. It can work well, like in Tim’s case, but it means choosing renters with extra care.

I asked Tim: Any final words of advice?

“Don’t talk about it; be about it! You can only talk about investing in real estate for so long before you need to take action!”


Ever pursued house-hacking? Any experiences to share? Horror stories?

You know we love a good story around here…

About Author

Brian Davis

Brian is a rental expert with a passion for house hacking! He and his partner Denise are the founders of, which provides free mini-courses, webinars and other education on passive income and house hacking.


  1. Travis Zappia

    Really appreciate this article!

    I started to get the Real Estate bug at the end of last year and have been reading and looking for properties to invest in for Buy and Hold. In the meantime until I find a property I have been house hacking the two additional bedrooms and have been loving the additional income that I am going to help to potentially fund multiple investment properties.

    I love the thought of purchasing a duplex in August once I have lived in this home for a year.

  2. chris gibbs

    Great to hear about other investors that are in the same boat as me and made it through! I am just finishing up the renovations on a triplex that I bought back in December! Going to be moving in this week though!

  3. Jenn N.

    That’s awesome. We are house hacking as well. We found a 2200 square foot duplex (each side) that is perfect for our family of six. We are on our second round of tenants and our new ones are amazing. Our kids are now best friends and our families hang out every day. We actually did have a bonfire or rather sat around the fire pit together last week. ?

    • Brian Davis

      That’s fantastic Jenn! Congratulations. You’ve managed to enrich your life both financially and personally, which is ultimately what personal finance and rental investing is all about. How did you find the property, any tips?

      • Jenn N.

        I actually found the property on Zillow of all places. I was pregnant and had insomnia at 2 am it popped up as new while I was scanning. I was familiar with the area and knew it was priced below market so we offered over the asking price and sent a letter (complete with cute pictures) explaining how it would help our family out financially. Three other offers came in that day but they accepted ours. My advice would be to move fast if you know it’s good and I really think letters can help. We bought a fourplex the same way. I couldn’t say we were going to live in itbut I explained how it was an investment into the future of my four boys. 🙂

        • Brian Davis

          Great illustration of the power of personal touch in real estate investing. Love the letter idea, and the execution.
          Thanks for sharing Jenn!

  4. Eddie Lehwald

    Great stuff Brian! For a newbie I don’t think it gets any better than duplexes. Speaking from my own experience….my girlfriend and I are currently house hacking a duplex that we bought in September 2015. It turned out to need a LOT more worked than anticipated-what we thought was going to be a quick “new paint, new carpet, ready to go” turned into gutting the first floor and starting from scratch-while living there. Hoo boy.

    Because we were so completely off on the remodeling costs we also ran out of money so at the darkest point we were stretched razor thin, doing almost all of the work ourselves, and generally wondering if this was the worst decision that we had ever made. If it was a single family house we would have been in serious trouble, but we had some inherited tenants on the other side-they were kind of terrible but the money coming in from them is what saved us.

    It was a brutal, “school of hard knocks”-type of an education but we stayed positive (for the most part) and got through it. We’ve since booted out the inherited tenants and moved onto their side, and the other side is completely renovated/updated and rented to great tenants (with whom we do, in fact, share a fire pit), the mortgage is covered and we’re finally seeing our savings accounts grow again in a big big way.

    I’ve since discovered BP and found a lot of fantastic info here; that, coupled with the hard-won knowledge (and money!) from this first house hack is setting us up to buy another property this year.

    • Brian Davis

      Wow, what a ride Eddie. I’m sorry it was such a painful experience, but it sounds like you came through it intact and better off for it. I’ve had a few experiences like that myself.
      The next one will almost certainly be easier (and more profitable, faster).
      Best of luck with your next property this year, keep us posted!

    • Tim Puffer

      Going through that tough time is invaluable. Your next property you’ll be able to better estimate the costs and issues going in. The fact that you took action, got started, and pushed through some tough points is what will make you successful!

  5. Cody L.

    ““Don’t talk about it; be about it! You can only talk about investing in real estate for so long before you need to take action!””

    Loved that quote. I get asked all the time “How do you get started?” I reply “You get started”. Most people will become forum junkies and read read read. At some point you need to take the plunge.

    Congrats to this guy. You’ll be at 1000 units before you knew it as you have the right attitude and mindset

  6. Amy Xu

    I’m in the same exact boat as Tim. I was able to purchase my first duplex with FHA 3.5% down, which I am going to house hack. The previous tenants were also not the cleanest and smoked so I need to do some repairs and upgrades to make the place more rent ready.
    Brian- can you advise how Tim was able to pull off the HELOC? I will be borrowing money to renovate the duplex but want to pay off my borrowed money as soon as possible. Any advice would be appreciated! The selling price was 175K but the city assessment for the property is 241K.

    • Brian Davis

      Hi Amy, and congratulations on the duplex purchase! You’ll just need to call around to lenders to get a sense for HELOC pricing and terms in your area, and how they’ll work for your property. HELOCs are great because of their flexibility, and while I’ve never used one myself, the investors I’ve worked with who have say that they’re easier than mortgages to get funded.

    • Brian Davis

      Thanks Jasmine, and I’m excited to hear that your next step is moving forward with your first investment! Please don’t hesitate to reach out over PM at any time if there’s anything I can do to help.

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